ISLAMABAD - Pakistan People’s Party Wednesday said that the ruling Pakistan Muslim League-Nawaz’s ‘Ishaq Dar economy’ had been exposed as rupee crashed against the dollar.

Unveiling the PPP’s charge sheet on the PML-N’s economic mismanagement at a news conference here, PPP leader Nafisa Shah said the government had been faking the economic achievements for the last five years under the ‘Dar economy’ introduced by former Finance Minister Ishaq Dar.

“The PPP is concerned at the total economic mismanagement of the PML-N government characterised by fake and fudged numbers, an exchange rate artificially showing a stronger rupee, artificially build reserves, all of which are now unravelling as former Minister Ishaq Dar is in hiding and hiding also his crimes of omission and commission,” she said.

She added: “In our view the charges by NAB are much smaller as compared to this charge sheet which holds him and the PML-N government responsible for bringing this country to the verge of a financial disaster and worse off economically than 2013.”

The government’s profligate spending on boondoggle projects has led to huge debt burden on the nation, “a current account deficit that was unsustainable and depletion of our reserves,” she said.

Shah said this was further compounded by wasteful expenditures which could have better spent in growth-making projects. “Former prime minister) Nawaz Sharif promised that he would break the begging bowl for this country,” she said.

The PPP lawmaker said instead it reported that this was the second time this government is going with a begging bowl to a friendly country.

“The first time was when Saudi Arabia gifted $1.5 billion to Pakistan and now apparently Shahid Khaqan Abbasi is going with one to China for a $2 billion injection,” she added.

The PML-N, she said must answer many things for the present state of affairs. “First, after four years of artificially keeping the rupee strong against the dollar by injecting dollars into the economy, the government has in the last 100 days allowed the rupee to fall against the dollar. This 10 per cent depreciation has added to our debt by 9.5 billion dollars or nearly 1 trillion rupees. Every Pakistani today owes 130,000 rupees in debt.”

Total debt and liabilities in June 2013 were 16.338 trillion rupees which increased by 10.476 trillion rupees during the last 4.5 years and reached to record 26.814 trillion rupees in December 2017, she said.

As per the State Bank of Pakistan, gross public debt to Gross Domestic Product was 63.5 per cent however, the independent economists question the credibility of GDP figures quoted by Pakistan Bureau of Statistics and economists claimed that debt to GDP is around 70 per cent, Nafisa Shah said.

She said the total external debt in June 2013 was $60.899 billion, which increased by more than $25 billion during last 4.5 years and reached to $88.891 billion in December 2017.

“With the devaluation of the Rupee by 10 per cent in 100 days, we have increased our debt by 9.5 billion dollars overnight, and we are now at 95 billion dollars,” she said.

Second, Nafisa Shah said: “the reserves were grown not through increase in exports, or investments or savings, but mostly through borrowing. Even those reserves are depleting fast”.

She said that the SBP gross reserves were $19.65 billion after second quarter of Financial Year 2016-17 which declined by $3.89 billion and reached to $15.76 billion after second quarter of FY 2017-18, she claimed.

The International Monterrey Fund, she said, in its report stated that on February 14, Pakistan’s net international reserves were actually minus $724 million, as Forex liabilities stood at $13.5 billion against gross official reserves of $12.8 billion, with foreign debt expected to swell to $103.4 billion by June 2019.

Third, by strangulating the economy with high taxation, very high power tariff and by artificially manipulated rupee against dollar rate, the country was facing one of the most gaping current account deficit. “First time in the history, the imports went up to $52 billion leading to a trade deficit of $32 billion during the fiscal year of 2016-17,” she said.

Shah said the fourth, the government has not made full use of China-Pakistan Economic Corridor. “Instead of using this to boost production and industry, this has just been used for very expensive power projects, which have only added debt burden to the country,” the PPP leader said.

She said the privatisation had been a disaster. “Instead of restructuring public sector entities they have just allowed them to accumulate debt. In the last meeting the secretary privatisation commission flatly refused to endorse the governments hurriedly designed buy one get one free plan,” she said.

Shah said the ‘PML-N lions roared’ that they would make Pakistan an Asian Tiger. Instead they have made Pakistan a client state dependent on largesse from friendly countries.

“After the completion of Extended Fund Facility Programme, the IMF has painted a bleak picture of the overall economy of Pakistan with special emphasis on foreign exchange reserves, current account deficit and the country’s capacity to meet its foreign debt obligations. They have endorsed the fact that no reforms were carried out to take Pakistan on a sustainable economic recovery. It is feared that the nation is headed for another IMF bailout programme,” she added.

Comparing the PML-N government’s performance with the last PPP-led government, she said the Public Sector Entities’ debt in June 2013 was Rs425.27 billion, which reached to Rs1.21 trillion at the end of December 2017.

“Circular debt has doubled from 500 billion rupees in 2013 to nearly 1 trillion rupees in 2018. Current account deficit in 2013 was $4.6 billion as against where it was nearly $12.4 billion last year and with the current trend expected to reach $15 billion in 2017/18. Total debt was approx 16 trillion rupees. It has increased to 26 trillion rupees,” she said.

 

SHAFQAT ALI