Dar ‘sabotaged’ deal with IMF, claims Miftah

Former finance minister says the international money lender lacks ‘interest’ in giving money to Pakistan

Pakistan Muslim League-Nawaz (PML-N) leader Miftah Ismail has blamed Finance Minister Ishaq Dar to have “sabotaged” the deal with the International Monetary Fund (IMF).

Former finance minister Miftah Ismail made these remarks in a session titled 'Pakistan in the midst of crisis' in Karachi on Wednesday.

Raising alarm over the long-due continuation of the deal with the international money lender, Miftah claimed: “IMF lacks ‘interest’ in giving money to cash-strapped Pakistan.”

Recalling his dealing with the lender while he was heading the country’s finances, Miftah claimed to have persuaded the IMF to trust the country on fulfilling commitments until Dar was sworn in – indicating that the current finance minister did harm to the good terms with the financial institution.

He recalled that Pakistan has gone back on commitments three times.

'Petrol subsidy formula ineffective'

Reflecting on the petrol subsidy announced by the government on Sunday, Miftah said that he believed that formula would not be effective.

“We provide subsidies on petrol by taking loans,” he said.

Since the government announced the petroleum subsidy — which initially amounted to Rs50 per litre amount and was later increased to Rs100 per litre — several red flags were raised as analysts and economic experts have been criticising the move as it may jeopardise the ongoing struggle to convince the IMF board.

IMF’s resident representative for Pakistan Esther Perez Ruiz had also clarified that said the international money lender wasn’t consulted on the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people.

“Fund staff is seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” she said.

This is not the first time petrol price subsidies have been a sticking point for the IMF. The previous government led by former premier Imran Khan had given out petrol subsidies, which stalled the IMF programme last year.

Warning of the risks, Miftah mentioned that if Pakistan defaults, it would be a grave situation for the country as people belonging to the rich segment will bear the brunt but the poor people won’t be able to make ends meet.