ISLAMABAD - Pakistan People’s Party leader Senator Sherry Rehman Thursday said that the government’s borrowing policy will damage the country’s sovereignty.
Commenting on the upcoming budget, the senator said no country can become truly sovereign if it relies on loans and foreign aid as a matter of form. “Borrowing in the form of short-term loans has become the finance minister’s de facto policy and as many have warned, this could be catastrophe,” she said. She said the government figures expose its regressive economic policies, which severely damaged the country’s economy.
She regretted the government had taken Pakistan deeper into the borrowing trap more than ever before. “This must be the only government that is happy about its trade imbalance,” she said, when responding to the launch of the Economic Survey.
Sherry said by putting everything on Chine-Pakistan Economic Corridor, which was a unique Foreign Direct Investment opportunity, the government was sitting back and explaining away all its missed targets and growing deficits.
“Instead of even pretending to balance its budget, this government is going headlong into the next financial year by deepening the huge annual current account deficit. This is unprecedented even for this government which has run the treasury on empty. According to the Annual Plan 2017-18, this budget will be a chronology of their incessant borrowing, more indirect taxes, surreal deficits and skyrocketing debt,” she added.
She added: “It is projected that our current account deficit will reach a staggering $10.4 billion from $7.2 billion last year. This is mainly because our trade deficit amounts to almost $26.9 billion which was roughly $16.5 billion during PPP’s last year in government. Estimates suggest that this year’s current account deficit rose by 42 per cent compared to last year. How is this not raising any red flags for the government.”
The lawmaker said the PPP had continuously pointed out the dangerous downward trajectory that Pakistan’s economy was taking. “Since this government came to power, our current account deficit has constantly been increasing. Trade deficit and borrowing have reached record highs, exports are down, remittances are falling and FDI is plummeting,” she said.
The senator also lambasted the government’s track record and failed campaign promises saying: “Exports have declined by $3 billion, external debt has increased by $6.3 billion, domestic debt has increased by 78.5 per cent, there is a decline of 2.8 per cent in remittances and circular debt has reached over $4 billion in the span of 4 years. Whatever happened to the big promises the Pakistan Muslim League-Nawaz made during the campaign?”
She elaborated: “The government has once again, for the fourth consecutive time, failed to meet the target GDP growth due to their own ruinous economic policies and poor performance. Economic indicators are gloomier since they have missed all of their major economic targets. The fiscal deficit for instance is 4 per cent over the target and key sectors such as agriculture and service are not showing encouraging signs.”
The PPP leader said indirect taxation was another point of concern. “How can a country address its huge social inequalities if it continues to rely on indirect taxes? And a fiscal policy with no plans for raising revenue at home will just end up in more borrowing. In fact, according to reports, Pakistan is already planning to get $8.1 billion in new loans. We cannot afford that as we are already stuck in a merry-go-round of borrowing,” she explained.
The government, she said, does not have a coherent economic framework, nor does it seem to be bothered by this economic freefall.
“Everyone, from top economists to the International Monetary Fund and World Bank pointed out the need for structural reforms and clearer policies. No one in the Ministry of Finance seems to pay heed,” she said.
SHAFQAT ALI