ISLAMABAD: The coalition government, while urging the nation for adopting austerity measures as a cultural norm to reduce wastage of fuel and electricity amid soaring economic challenges, stated that due to the agreement by the previous government with the International Monetary Fund (IMF) it had no choice but to take tough decisions to save the country from default.
Defence Minister Khawaja Asif in a joint press conference flanked by Minister of State for Petroleum Division Senator Musadik Masood Malik, Minister for Kashmir Affairs and Gilgit-Baltistan Qamar Zaman Kaira, and Minister for Communications and Postal Services Maulana Asad Mehmood blamed the previous government for the current economic challenges while saying that that former prime minister Imran Khan always makes claims about the alleged conspiracy against him but never talks about the performance of his government.
The petroleum products prices were increased for the third time which had two major reasons including the situation in which PTI left the economy and ruled for around four years, he added.
“When we succeeded in the no-confidence move against the former prime minister, there was a choice to immediately go for election and put in place interim setup and let the new government tackle the economic changes. The agreement with International Monetary Fund (IMF) which was not implemented by the previous government and the subsidies announced at the end time further created challenges for the coalition government,” Asif said, adding that the economy was frail and increase in the oil prices further deteriorated the situation. The IMF agreement was started by the PTI government and it set the terms and conditions and there was no way but to meet these terms and conditions, he added.
The minister added that the PTI chairman left the country on the verge of collapse and now the government has no choice but to take tough decisions.
Asif said that the coalition government inherited an economy in tatters from the PTI-led government.
The Minister for Defence said that the nation, especially the traders’ community, should adopt austerity measures as a cultural norm to reduce wastage of fuel and electricity amid soaring economic challenges. A huge amount of electricity can be saved if people start their businesses early in the morning and close by Maghrib prayers. He said that saving electricity means saving oil.
“Neither will we have to use expensive oil that much and nor will the consumers have to bear the burden of expensive electricity if we do this,” he said, adding that it is just a fundamental change that people need to bring to their lives. Traders must accept the new timings of shop closure decided by the federal cabinet to reduce electricity consumption and fuel usage which would benefit the common man. “We can control the price hike through internal measures, such as austerity. However, at the national level neither the previous governments nor the societal factions adopted austerity to control unnecessary expenses”, he added.
He said that 3,500 megawatts of electricity can be saved through this method and the amount will go over 4,000 MW if Karachi also follows it. He; however, said that the traders are currently not willing to accept this suggestion. “They accepted this during Covid-19 due to the fear of the virus,” he said.
He said that the government will take the responsibility to lessen the inflation and difficulties of the common man. He said that the fuel prices would go down if the Russian-Ukraine war stops.
“We need a collective response and approach to address the prevailing economic issues. Rest assured that the government will play its role in protecting the masses and will take every possible step to ensure relief,” he underlined.
The defence minister pointed out that if the Ukraine-Russia war ended then the fuel prices would nosedive which would benefit our economy. “We have limited resources and are also a nuclear power which is the deterrence that helped us survive all crises”.
Asif, while lambasting the fuel hoarders said the profiteers who exploit the economic crisis and problems of the poor started stockpiling amid the decision of fuel price hike.
“The tanker and petrol pump mafia don’t resist squeezing the poor masses and fleece them through their unbridled hoarding of fuel”, he said. He queried, “Are these people sympathetic with the nation? No, they are not. They must not exploit the public in distress.”
He said the political capital would recover but the national reserves and poor people’s problems, leaving them empty-handed, might not recover. “We are fully aware of the problems faced by people and are hopeful that this crisis will end in the future.”
The defence minister added that there were dozens of companies in the public sector that were not privatized due to the previous regime’s incompetence as they were incurring $2.5 billion losses like the Discos, PSM, Sui Southern, etc., going into 90 percent losses.
“These public companies should be governed by private partners and this bleeding of resources must stop which is going for over the past four decades. However, their employees should be given a handsome golden handshake so that they may live a suitable life after privatization without any economic loss,” he suggested.
However, Musadik said that the previous government laid landmines through subsidies on fuel and left the country in a depleting economic situation.
He added that the decision to increase fuel prices was a difficult decision taken with a heavy heart by the government after many deliberations and discussions.
The decision of the PTI government to limit fuel prices till June had a certain condition mentioned in the agreement which the nation should read on the website of the IMF, he said.
“Imran Khan had decided that there will be no further increase in fuel prices which had no ratification in any official document and was only a political proclamation.”
If we had delayed the price increase for a month than it might have cost Rs100 to 120 billion a month to the national exchequer.
“The total defence budget is of Rs1,536 billion, whereas, this fuel subsidy cost is between Rs1,200 to Rs1,500 billion which had been announced by the ousted Prime Minister Imran Khan”.
Malik said the entire country’s public sector development programme (PSDP) was of Rs727 billion, the federal government expenditure that is much criticised by the critics was only Rs550 billion, and the BISP relief was of Rs360 billion given by the current government.
He added that it was easy for us to shrug our shoulders by claiming it as the decision of the previous government but the government took the responsibility to fix the economic issues.
“Forty percent Pakistanis (80 million people) earning Rs35,000 to Rs40,000 will be given BISP Relief funding of Rs2,000 as an assistance,” the minister remarked.
He said that Rs1.1 trillion of subsidies were given on electricity during the last one year, asking can a country afford it. He said there was no circular debt in the gas sector during 2018 but currently it is Rs1400 billion which indicates the performance of the previous government.
“With a heavy heart, the government had to make an extremely unwanted decision,” Kaira said, adding that the money from the national treasury started draining due to subsidies as the fuel prices increased when the incumbent government took charge.
He criticised the former finance and federal ministers saying that those who signed contracts with the IMF were saying that the fuel prices will exceed Rs300 per litre and subsidies will have to be abolished. He said that they were correct because they knew the details of the contracts.
“No government wants to become unpopular among the people but what choice do we have,” he asked, adding “Whether to become a Sri Lanka or to make efforts to steer out of this crisis.” He said that only Pakistan is not facing such crises but the entire world’s economy is suffering.
“A labourer who avails Rs80 subsidy for one litre petrol while a Land Cruiser owner takes Rs8,000 subsidy on 100-litre petrol. Can such a subsidy be continued,” he asked.
He said that the experts and media were asking why the government was not making immediate decisions to stop the economic decline. He said that the government tried to avoid putting the burden on the people and find a way to cushion them against the blow but it had no choice except to take tough decisions.
Kaira said that it was the need of the hour to change national habits to save the energy and come out from the current crisis of power and gas. “Only political powers could address the longstanding issues of the state and lead the county to the path of development for a bright future of the masses. The government is taking hard decisions because the national exchequer could not afford more subsidies”, he added.
Mehmood suggested that a national commission should be formulated to probe which powers were behind former Prime Minister Imran Khan who took over the country and left the state in various crises. He said that the government was now taking emergency decisions.
The minister said that all political parties of the coalition e government, stakeholders and experts were onboard to take joint efforts for a bright future for the country.
He said a large number of the country’s population was living below the poverty line amid a weak economy.
Copyright Business Recorder, 2022