LAHORE: Former Finance Minister Miftah Ismail says that a powerful democratic coalition government representing all segments of the society can break the status quo and lead the country into a right direction.

Saying that the country has been damaged due to intervention of the military establishment in the political affairs, especially in the recent years, he terms continuous change of finance ministers in last four years and use of money for subsidies and other political gains as main reasons behind distrust of the International Monetary Fund (IMF).

“If we want to break this status quo and lead the country into the right direction, the only solution is to have a powerful democratic coalition government represented by all segments, including farmers, traders, students, growers, politicians etc. It is possible as we see in our neighbouring country–India– where such coalition government is working well, though it is anti-Muslim,” he explained.

“I think Pakistan is not functioning well due to the lack of structural reforms in various sectors, including tax collection from all. All this mess has led to placing our country among the worst governed countries,” he said while speaking at a session, titled “Pakistan’s political economy: Is there a way forward” at ThinkFest here on Sunday.

Miftah says political parties run like monarchies

While expressing grave concerns over the continuous political instability and the role of politicians and other stakeholders, the former minister claimed to have slightly improved the economy after inheriting it in a very bad condition from the PTI government.

He said though the Covid-19 had created some ease to the then government in implementing the IMF programme, the situation again went out of control when Shaukat Tarin took over the charge as the finance minister and made a lot of spending for political gains on behalf of the then prime minister Imran Khan.

“First Asad Umar, being finance minister, delayed opting for the IMF programme. But when he decided to go, he was fired. Later, (Abdul) Hafeez Shaikh came and matured the IMF loan deal and carried out various reviews.”

Miftah said when the IMF resumed imposition of conditions in the post-Covid situation and Mr Shaikh started implementing the same, the PTI government replaced him with Tarin.

Mr Tarin, according to him, contrary to the IMF conditions, spent billions of rupees on the subsidies in power and energy sectors, widening the budget deficit to a record level. In February the same year, they backed out of the IMF programme.

“In April last year, I came and started efforts to resume talks on IMF programme’s revival and reviving it after massive efforts. But after 15 days of IMF programme revival, I was also fired. This also led to annoying the IMF. Now you tell how to run this country in such a situation,” he said while addressing the audience.

He said as the finance minister, he tried to improve the country’s economic situation through various measures.

Mr Ismail revealed that there were 2.2m shopkeepers but only 30,000 were paying income tax. He said he planned to impose Rs3,000 tax per month on each shopkeeper but unfortunately he couldn’t do so. He said if 10m overseas Pakistanis could send USD30bn, why this country of 220m is unable to cross the USD 30bn exports in total to date.

The former minister was of the view that the provinces must perform well by increasing their tax base and wondered at the meagre tax collection of only Rs20bn by Khyber Pakhtunkhwa.

“I just say that why the provinces are only focusing on property tax. They should tax the agriculture and other sectors too in a bid to increase their tax collection. This will also give them more autonomy and end their dependence on the federation,” he maintained.

While discussing the military role, Mr Miftah said from 2014 to 2020, the military establishment’s intervention in the political affairs didn’t do well with this country. However, added in the same breath, the establishment didn’t stop anyone from bringing about reforms.

“The establishment’s role remains to some extent in the federation and not the provinces. It doesn’t stop them to bringing all the children to schools, tax agriculturists or other sectors. But on the other hand, the politicians too continue showing non-seriousness and still playing the game of vote of confidence and ignoring the economy,” he deplored.

He said the political parties were being run on the pattern of monarchies and they were not ready to hold elections and give the middle class a chance to come up.

While responding to various questions, Ismail said the government would have to reduce import duty if it wanted to increase imports.

“In a bid to increase exports, I had also planned to tax the industry that remains unable to export their 10pc of the total goods they manufacture. But I couldn’t do so as I was removed from the office,” he said.

Published in Dawn, January 16th, 2023