Staff Reporter
Islamabad
The National Assembly session on Wednesday was adjourned for the day after PPP lawmakers created chaos in the House over Energy Minister Omar Ayub’s remarks, in which he stated that corruption is “in the genetic makeup of the PPP and the PML-N”.
In a speech laden with criticism, the energy minister called out the performance of the previous governments, stating that there was an unprecedented price hike during the tenure of the PPP. In an apparent reference to former president Asif Ali Zardari, he also called out “Mr 10pc” in his speech.
The PPP took exception to the comments and asked the National Assembly Deputy Speaker Qasim Khan Suri to ask the minister to refrain from making such comments. However, when Ayub continued his tirade against the opposition, PPP lawmakers led by Agha Rafiullah surrounded the energy minister and started tearing copies of the agenda, prompting treasury members to step in to prevent an altercation. While Ayub and Rafiullah engaged in a verbal clash, treasury members, including Minister for Economic Affairs Hammad Azhar and Minister for Science and Technology Fawad Chaudhry, stepped in to pacify the PPP lawmakers.
At the start of the session, Special Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh said those who had themselves approached the International Monetary Fund (IMF) should not be criticising the government for doing the same.
Shaikh responded to what he said was “undue” criticism from opposition benches.
Shaikh said that the governments that came to power both in 2008 and 2013 had gone to the IMF. “This is a national problem, our development isn’t at the pace that we don’t go to the IMF.
“No one goes to the IMF happily, whether it be the previous governments or the current one. The situation compels us [to do so],” he said.“Some people have claimed that in negotiations with the IMF, individuals from both parties are representatives of the IMF,” the advisor said, adding that it was disappointing that people like Reza Baqir — who is the incumbent governor of the State Bank of Pakistan — were being discarded for having worked in the IMF earlier.
“We should be proud of Reza Baqir. He went on to study in the best American universities after having completed his initial studies from Lahore. He went on to join the IMF solely on the basis of his capabilities,” Shaikh said, adding that those who did not have the credentials to even enter the halls of IMF were criticising the SBP governor for having worked there.
The special assistant to the premier on finance also provided some of the advantages of an IMF programme.
The first, he said, was that the financing of $6 billion provided was based on easier conditions, adding that if this money was obtained commercially it would be more expensive.
The second point, he said, was that the whole world was reassured that Pakistan was ready to operate with “discipline” and ready for partnerships with other parts of the world.
“The direct advantage of this is that other countries and other international organisations including World Bank and Asian Development Bank also increased their support for Pakistan.”
Situation inherited by PTI govt
During his address to the lower house of Parliament, Shaikh explained the economic situation inherited by the PTI government.
Summarising the situation that was steering the government, the premier’s special assistant said there was a loan of Rs95bn, Rs5,000bn to be returned in the next two years, highest current account deficit in Pakistan’s history and nosedived reserves alongside an upward trajectory in the fiscal deficit.
He said that the other “dangerous situation” inherited by the government, which needs to be focussed on, is regarding exports.
“The crisis in Pakistan is that our country doesn’t have dollars […] We are going on depleting dollars and increasing our liabilities in dollars. And what is happening to exports? Because there is only one way to increase dollars, that is exports.”
Shaikh said that over the past five years the rate of growth in exports was zero.
“A system in which the dollar was purposely kept cheap [was in place],” he said, adding that imports were growing in the country, during this time and this affected industrialisation and exporters were disadvantaged.
“This is an issue we have to think about as a country. My main purpose is not to criticise but to present facts.
This is also a challenge for the government.”
He said that other concerns were the slow rate of development in agriculture as well as the electricity sector.
“We as a country have been unsuccessful in solving this problem and what manifests this is the circular debt.”
In summary, Shaikh said that when the PTI government came to power, it could see the country entering into a crisis and no one was ready to give Pakistan a loan.
“When people raise questions that you didn’t do this or that, the fundamental reason for that was that dollars had been depleted and nobody was ready to give us a loan.”
Shaikh said that under all conditions they had to save the country from defaulting.
“Why? Because it was be very dangerous for Pakistan.”
He said various allies of Pakistan had assisted it and another important step was going to the IMF.
Later, during his address, Shaikh shared certain steps the current government had taken to take the country out of the crisis it was in.
He said that one of the things that was required was to reduce expenses.
“This government has taken some decisions which are historic,” he said, adding that one big decision that was taken was to freeze the budget of the Pakistan Army.
“Has anyone taken such a decision before?” he asked.
The premier’s special assistant added that the civilian government’s budget was also reduced by Rs40 billion.
“These are big decisions. I have been a part of various governments, no one used to take such decisions,” Shaikh said.
With regards to managing expenditures, he said that a strict budget was set.
“I want to tell you that taxes in the first seven months, the target was around 2,200 [billion] and we achieved around 2,100,” Sheikh said.
Additionally, he said that borrowing from the SBP over the past seven months was at zero, as they had decided not to borrow from the State Bank because such borrowing tends to be inflationary.
The premier’s special assistant said that when they sat down to make a budget they decided that if they were to spend money on anyone it would be on two groups — the weakest segment of society and those who are supporting the government in increasing exports.
He said that the impact of the measures taken to benefit exporters was that exports had increased.
Minister Omar Ayub stated that the opposition continue to cry crocodile tears, but are forgetting about the ground realities during their tenures.
Reading aloud from a report, the minister said: “[In 1974] the measures and the price situation were so acute that despite the measures outlines above, there was a higher rate of inflation in the economy.”
Coming to the current situation, Ayub said that the PML-N had also pointed fingers at the government for the current deteriorating economic situation.
“They talk about different things, but when it comes to figures […] in five years there was a 101pc increase in the circulation of currency notes during the PML-N government. Who had to face this, Imran Khan and the PTI government.
“
