FDI without monetary, fiscal course correction not possible: Miftah

Former finance minister Miftah Ismail believes that foreign direct investment (FDI) in Pakistan will remain unlikely without corrective measures in monetary and fiscal policies. He lamented the absence of substantial investments over the past two decades that could have propelled the country's economic growth through enhanced production and exports. Addressing the Habib Public Alumni Association, Ismail shared his thoughts about Pakistan's economic landscape. He underlined the crucial role of sound economic policies in fostering progress, adding that mere eradication of corruption would not lead to prosperity.

Ismail criticised the country's reliance on informal sources of financing, highlighting the need for bank loans for sustainable business operations. He also voiced concern over the alarming illiteracy rates among Pakistani children, noting that 78 per cent of children under 10 years of age struggle for access to education.

About the current political dynamics, Ismail accused former prime minister Imran Khan of lacking a democratic ethos, alleging his past collaboration with the establishment during political protests. He suggested that Khan's stance towards the establishment was contingent upon its favourability.

Regarding his own political party, Ismail expressed confidence in its ability to garner support through democratic means. He acknowledged the importance of constructive relationships with the state institutions, thanking the military for upholding democratic norms. Reflecting on alleged economic mismanagement during Imran's government, Ismail criticised the volatility in petrol prices and highlighted the failure to anticipate inflationary pressures.

He attributed these shortcomings to inadequate leadership and policy decisions. Ismail also criticised Imran's decision to delay seeking assistance from the International Monetary Fund (IMF) which, he believes, exacerbated fiscal challenges.

He stressed the need for an investor-friendly environment to attract FDI, cautioning against excessive reliance on borrowing to meet financial obligations. Moreover, the former finance minister condemned the indiscriminate printing of currency notes, citing it as a contributor to inflationary pressures. He called for reforms in budgetary allocation mechanisms, particularly revisiting the National Finance Commission (NFC) Award to address fiscal deficits.