Dr Muhammad Hanif Mughal, Chairman of Pakistan Tehreek-e-Shadbad, said on Monday that it is impossible to run an economy on debt for an extended period. He said that an economy dependent on debt has no future and that politicians should support a new agreement with the International Monetary Fund, which is imperative for survival. Dr Hanif Mughal said in a statement issued today that a new loan from the IMF is necessary. We should use the IMF’s support to correct the economic problems, as we no longer have room for extravagant spending and irresponsible decisions.
He stated that international lenders dislike finance ministers who prioritise politics. The lender thinks the economic situation can improve with a non-political person serving as a finance minister.
He noted that Shahbaz Sharif’s 16-month government saved Pakistan from default with the help of the IMF, but the people had to pay a very heavy price for that, as elites were saved from the impact of the IMF’s conditionalities. He said inflation would have increased by several hundred percent if the country had gone bankrupt. Hanif Mughal said that the government has struggled with debt since its creation. Now, the country’s economy relies on loans to pay salaries.
Imran Khan’s four-year government has taken unbelievable amounts of loans, but he informed that this valuable capital has also been wasted. The IMF has recommended thoroughly reviewing the tax incentive regimes to eliminate and streamline unnecessary elements. The lender believes a more regular tax system with a lower tax rate backed by a larger tax base would be more consistent.
Dr Hanif Mughal said that the IMF, economists, and Muslim League (N) favoured privatising PIA and other institutions at that time. Still, the People’s Party had become an obstacle.
PPP has proposed a public-private partnership, which is not feasible. In such a situation, concerns about the government’s privatisation of ailing institutions could strain relations with the IMF.
He said that if the reform process is obstructed, the new agreement with the lender may go sour.