ISLAMABAD: The Pakistan Peoples Party (PPP) on Friday launched an attack on the government’s economic track record, saying the country is in the midst of an ‘economic crunch’.
“Amid reports of falling exports, remittances and Foreign Direct Investment (FDI), the news of ballooning external and domestic debt and parochialisation of national institutions like the State Bank of Pakistan, has unleashed a wave of concern among key economic stakeholders in Pakistan,” said PPP vice president Senator Sherry Rehman said in a statement issued on Friday.
The PPP’s vice president said the current government had already taken massive loans from the International Monetary Fund (IMF) and now it had added more debt to its stockpile by floating $1bn bonds in the international debt market.
“According to recent estimates from the SBP, Pakistan would be paying around $5bn each year in foreign debt servicing until 2021.”
She said this borrowing was taking place at a time when the country’s external accounts were already under extreme pressure and there was fresh uncertainty about the future of low oil prices. “How will we repay all these debts?” she questioned.
The senator also showed concern over the federal government’s decision to move key departments of the State Bank of Pakistan from Karachi to Lahore, calling it “Punjabisation of Pakistan,” adding that strategic institutions like the SBP should not be used for political gains.
Ms Rehman also criticised the government over staging fake awards on performance.
The ministry of finance and the ministry of planning and development both claimed that ‘Emerging Markets’ was a World Bank and IMF publication, she said.
“However, the IMF denied its affiliation with the publication. Five Pakistani state-owned enterprises funded the ‘Emerging Markets’ edition that carried a supplement on Pakistan. The federal government is practically buying their own laurels to cover up their dismal performance,” she added.
She denounced the prime minister’s recent claims of making electricity cheaper. According to IMF’s recent report, the notified power tariff had risen more than 35 per cent since 2013.
The senator further stated that the current government was leaning heavily on indirect taxation, which was “making our exports costlier and therefore less cost-competitive in the global market”.
She said losses incurred by three major public sector entities (PSEs) — the Pakistan International Airlines, Pakistan Railways and Pakistan Steel Mills — and the debt of power sector companies had risen to Rs1.365 trillion, which was higher than the consolidated Annual Development Programme of Rs1.25tr in the current fiscal year.
In addition to that, there was piling debt in the import of Re-gasified Liquefied Natural Gas (RLNG) that stood at Rs12bn currently, she said.
The PPP leader said exports and FDI had been falling ever since the current government came into power.
“The export figures have come down 8.2pc, from $25.1bn in 2012-13 to $20.8bn in 2015-16. FDI declined by 38pc year-on-year in the first quarter of 2016-17. Additionally, the current account deficit ballooned by 136pc year-on-year during the first quarter of this fiscal year,” she said.