ISLAMABAD: Parliamentary Leader of the Pakistan Peoples Party (PPP) in the Senate Sherry Rehman has said that the country’s economy is witnessing an unprecedented damage under the government’s “controversial and non-transparent” agreement with the International Monetary Fund (IMF), which has wreaked havoc on the Pakistani street by unleashing a slew tsunami of unbearable hike in prices of utility and food items.
In a statement issued here on Wednesday, Ms Rehman said that indirect taxes from Rs1,000 billion to Rs1,300 billion would add to dangerous levels of inequality.
“It has also indebted Pakistan to the point of crisis, and has now taken us into a situation where the central bank is being made totally unaccountable to Pakistan’s parliament or the people,” the PPP leader said while commenting on reports about the federal government’s plan to make the State Bank of Pakistan (SBP) autonomous.
Says Pakistan’s total debt has reached Rs44 trillion from Rs12.5tr
She said the PPP had always dealt with the IMF but in entirely different terms, where the market alone could not ruthlessly determine prices, driving millions into poverty, homelessness and joblessness in the name of stabilisation goals.
“We had also given the SBP reasonable autonomy to make monetary policy, but never proposed opening up the county to ups and downs of international capital and its dictation,” she said.
“What we see today is a very worrying meltdown without any matching capacity for increasing direct taxation or actually widening the tax net. As a result, today we are totally exposed to debt, impoverishment and misgovernance on an epic scale,” said Ms Rehman.
Criticising the government’s economic policy, she said the country’s total debt had reached Rs44 trillion (around 90pc of GDP) from Rs12.5 trillion, circular debt was expected to skyrocket to a whopping Rs4.6 trillion in 2023, Foreign Direct Investment (FDI) was down by 30 per cent and the World Bank estimated only 1.3pc GDP growth this year, the lowest in the region.
“If this was happening in another country, the government would have resigned on its own,” she added.
Ms Rehman said: “Tabahi Sarkar’s tax target for the next fiscal will shift the major tax burden directly on the vulnerable who are already struggling at the bottom of the social pyramid.”
Under the IMF deal, she said, the Federal Board of Revenue (FBR) would increase indirect taxes by a massive Rs1.272 trillion in the coming budget and the government would continue increasing petroleum levy on oil products to the maximum level this year and next year to collect about Rs510 billion this year, instead of budgeted target of Rs450 billion.
Moreover, she said, the World Economic Outlook 2021 report had projected rise in unemployment from 0.5pc to 5pc during the current fiscal year.
“This is the same government which promised 10 million jobs and five million homes,” she said.
“To this point, we have not heard from ‘PTIMF’ what terms of the new agreement are. All we know is that the government is bending backwards to comply with IMF’s tough conditions, imposing indirect taxes in the upcoming budget and hiking electricity tariff by Rs5 per unit till June 2021. Do they even realise the consequences it will have on people?” she asked.
“Our economy is on the ventilator, the government seems to be in no mood to order vaccines and one after the other, our state institutions are being destroyed,” she said.
“Taking notice of inflation is not enough, what the country needs is swift action and a solid economic policy. People should not be paying the price for the incompetence of this incapable government,” she concluded.
Published in Dawn, April 15th, 2021