Former finance minister Miftah Ismail said on Saturday that for the next two years, the Pakistan government will have to work “to save the country from default and will have to enter another International Monetary Fund (IMF) programme.”
Speaking at an event, he said economic problems of the country cannot be solved unless radical reforms are introduced including the restructuring of budget.
Pakistan’s ex finance chief Miftah warns against any kind of debt restructuring
“Under the current tax structure, Pakistan cannot escape crisis,” he stressed. “The country will keep on recording deficits and it cannot escape the crisis until it eliminates the long-term unsustainable deficits.”
According to him, there was a dire need to raise the tax-to-GDP and export-to-GDP ratios to a substantial margin of 15% to see a positive change.
Pakistan has to repay $25 billion in debt every year to foreign countries and institutions for the next several years, he lamented.
“We spent on the public of the country but we have nothing to show for it,” the former finance minister said. “The population is rising at an unsustainable pace for the past 20 years and wake-up calls were given but it turned out to be pointless.”
However, Bangladesh succeeded in controlling its population, he said.
‘Pakistan not a destination of choice for investment’
According to him, Pakistan had low exports because foreigners were discouraged from visiting it.
Miftah calls for economic ‘overhaul’
“More foreign airlines land at Dhaka airport than Lahore, Islamabad and Karachi combined,” he underlined. “Terrorism played a negative role here.”
The buyers of our products prefer to call local businessmen to Dubai and Bangkok for inking deals, he said, stating that “not a single dollar in foreign direct investment (FDI) comes to Pakistan for export-oriented purpose.”
“Vietnam gets FDI for export. Samsung’s export from Vietnam is $68 million per year,” he said. “Pakistan and Vietnam used to have same value of exports in 1992 but now, Vietnam exports $300 billion worth of commodities and services.”
Pakistan is not a destination of choice for investment for any country, he regretted.
“International firms prefer to enter the markets of Vietnam, Cambodia and Bangladesh but not Pakistan,” he said.
The past five governments worked to reduce the circular debt but it is still ballooning, he said.
Moving on to airlines, he stated that PIA had been in loss for past 20 years “yet the government keeps on bailing it out and compromising public spending”.
PIA posts Rs60m profit in Q1CY23, NA told
The former finance minister also stated that the education sector of the country is also in shambles and “a large amount of children are stunted or wasted”.
He pointed out that hunger and malnutrition was causing stunting in Pakistan’s population.
“Our infant mortality is as worse as South Sudan,” he said.