‘Finance minister’s only remaining function is to get more loans to repay past ones’

Published July 16, 2023
Dr Aqdas Afzal (right), along with Dr Kaiser Bengali, Dr Masooma Hasan and Syed Shabbar Zaidi, speaks at the event on Saturday.—Fahim Siddiqi / White Star
Dr Aqdas Afzal (right), along with Dr Kaiser Bengali, Dr Masooma Hasan and Syed Shabbar Zaidi, speaks at the event on Saturday.—Fahim Siddiqi / White Star

KARACHI: “Any finance minister of Pakistan has only one very simple task of how to get more loans to repay past loans. That is the only function of the country’s economy left. There will, of course, be long statements about revenue generation, development, industrialisation, education, health, etc. But these are all fairy tales because there is no money for anything. And nothing will happen,” said eminent economist Dr Kaiser Bengali.

Speaking at a seminar — The State of Pakistan’s Economy: What Next? — organised by the Pakistan Institute of International Affairs (PIIA) here on Saturday, Dr Bengali said that the Pakistan he knew no longer exists.

“The revenue your latest budget claims to collect will never be collected. And the items on which the expenditure has been allocated will never be spent because we don’t have the money,” he said.

“The only thing that we need to do now in terms of managing the economy is how to get more loans to pay past loans. And since we will not get all loans to pay all our past loans, we will sell our assets. Everything is on sale here. We already have a banking sector that is 80 per cent foreign-owned, we have a telecom sector that is 100 per cent foreign-owned but more is to come.

Shabbar Zaidi calls for correcting NFC award, creation of new provinces, putting an end to smuggling from Iran, Afghanistan

“We have just announced the privatisation of a port terminal in Karachi, a Saudi team has visited all our airports and three major airports are about to be handed over to foreign interests. We use all kinds of terminologies to say we are not selling them we are just outsourcing them but basically it is handing over control of these assets. More and more will follow,” he pointed out.

Dr Bengali said that two windows have closed here, perhaps permanently. “One is the economy window and the other is the security window,” he said.

“Soon we will be employees of Chinese, Saudi, Emirati and other employers as Pakistan will be owned by them. We lost our economic sovereignty. It didn’t happen today. From 1993 onward for 16 years three State Bank governors came from outside Pakistan. They were employees of international organisations, they had not served in Pakistan for more than 10 years but now that we are burying our economic sovereignty in a more formal way, the economy window has closed.

“The security window has also closed. The international geostrategic architecture has changed. For some 60 years of the last 75 years of Pakistan’s existence we cashed in on the Cold War between the United States and Soviet Union. Pakistan did all the dirty work for the Americans and got paid for it. But the United States does not need our services anymore. If the confrontation is with China, the Americans need Indian, not Pakistan. In fact, Pakistan is an irritant in the process,” he said, adding that the irritant has to be tamed and de-fanged.

“And if we are defanged then of course there is no security role to play, no wars to fight. Then what will happen? The economic footprint of the military will increase. They are already into services and industry. That will increase. So we achieved independence from British colonialism and we are entering the phase of cantonment colonialism,” he concluded.

Adding to the economic gloom, former chairman of the Federal Board of Revenue Syed Shabbar Zaidi said that Pakistanis don’t even realise that they have ruined themselves.

“We don’t even have the money for repayment of our foreign debts of US $130 billion as per schedule. Some 85 per cent of our bank’s debts are used by federal government loans, inflation is on the rise, there is subsidy on electricity of over Rs1,000 billion, the state’s own enterprise losses are over Rs1,000 billion, there are unfunded pensions to be paid, over 50 million children are not getting education and on top of all that we have the highest population growth in the world,” he reminded.

His solutions to the economic problems included taking a strategic u-turn on the country’s location advantage and see China as our supplier and the USA as our buyer.

He also asked for transparency on the China-Pakistan Economic Corridor, an end to smuggling from Afghanistan and Iran, correcting the National Finance Commission Award, enforcing Article 140A of the Constitution by empowering local government, revival of the ‘Planning Commission’ with a non-political chairman and creation of new provinces, at least 10 instead of just four.

While sharing his opinions on the issue of the economy of Pakistan, Assistant Professor of Social Development and Policy at the Habib University, Dr Aqdas Afzal said that the country’s decline began when it opened free trade.

“But can we even do the trade? Do we even make anything exclusive that the world would want to buy from us? No one here talks about investment in human capital. We don’t have a skilled workforce and we opened free trade,” he pointed out, adding that other countries are now into strategic trade and value added trade.

“The United States only aims to compete with China. It makes whatever China cannot make,” he said while providing an example of strategic trade. “We should also identify winners and pick them to compete with the rest of the world,” he said.

PIIA chairperson Dr Masuma Hasan also spoke.

Published in Dawn, July 16th, 2023

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