LAHORE: Former prime minister Shahid Khaqan Abbasi has likened seeking a bailout package from IMF by Pakistan to admitting failure to manage its affairs.

“Approaching the IMF to get a bailout package is in fact admitting that we have failed in managing our affairs, our economy on our own,” he told a session of the Asma Jahangir Conference on A Growing Debt Burden: The Impact of State & IMF Policies here on Sunday.

Former governors of the State Bank of Pakistan (SBP) Shahid Hafeez Kardar and Reza Baqir as well as ex-Punjab finance minister Dr Aisha Ghaus Pasha were also among the panellists.

Mr Abbasi regretted that the country had secured IMF packages 24 times, but each time failed to benefit from it because investment was not made in the export-oriented sectors, which is the only solution to national economic problems.

Pakistan borrowed $65bn in 65 years but doubled the debt in last 12 years, laments Dr Aisha Ghaus Pasha

Criticising economic policies, he said rulers used to distribute free flour, 40 per cent of which is embezzled.

Referring to negative impacts of IMF terms on the economic growth and prices, he said the lender did not give money to stabilise the economy but to recover its previous loans.

He said solution to fix the ailing economy lied in political stability and a just judicial system to give a sense of security to investors.

He was not hopeful of any relief for the masses in the coming budget because the IMF would give target-based funds.

Mr Kardar, the ex-SBP chief, said that the country’s decline is self-inflicted as successive governments did not change their misplaced financial policies.

He said the state did not lack resources but rulers were spendthrift as even assistant commissioners were given precious luxury vehicles.

“Despite devolution of most of the state functions to provinces post-18th Amendment there exist 43 divisions in the federal government. This is because both the bureaucracy and politicians don’t have the desire to curtail expenses and want to maintain their offices and ministries.

“There are many offices of government agencies with functions unknown to the general public,” he said.

He predicted that many government departments could not be privatised; rather these would have to be shut down for want of buyers.

He also lamented at delayed completion of projects leading to manifold increase in their cost and unbridled smuggling causing revenue loss in the form of taxes and eating out local industry.

Dr Baqir endorsed Mr Abbasi’s views that economic stability depends on political stability and that taking loans is a shared problem of successive governments since 2007.

He said no single party could resolve the present crisis and all political forces would have to join hands for an economic turnaround. “We need a non-partisan plan and complete ownership to deal with the problem of debt burden.”

Dr Pasha said that while Pakistan borrowed approximately $65 billion in the first 65 years of its existence, the country has doubled its external debt in just the last 12 years.

Published in Dawn, April 29th, 2024