An economy dependent on loans has no future
Politicians should support a new deal with the IMF
Islamabad: Dr. Muhammad Hanif Mughal, Chairman of Pakistan Tehreek-e-Shadbad, said on Monday that it is impossible to run an economy on debt for an extended period of time.
He said that an economy dependent on debt has no future and that politicians should support a new agreement with the International Monetary Fund, which is imperative for survival.
Dr. Hanif Mughal said in a statement issued today that a new loan from the IMF is necessary. We should take advantage of the IMF’s support to correct the economic problems, as we no longer have room for extravagant spending and irresponsible decisions.
He stated that international lenders dislike finance ministers who prioritize politics. The lender thinks the economic situation can improve with a non-political person serving as a finance minister.
He noted that Shahbaz Sharif’s 16-month government saved Pakistan from default with the help of the IMF, but the people had to pay a very heavy price for that as elites were saved from the impact of IMF’s conditionalities.
He said that inflation would have increased by several hundred percent if the country had gone bankrupt.
Hanif Mughal said that the country has struggled with debt since its creation. Now, the country’s economy relies on loans to pay salaries.
Imran Khan’s four-year government has taken unbelievable levels of loans, but this valuable capital has also been wasted, he informed.
The IMF has recommended a thorough review of the tax incentive regimes with the goal of eliminating and streamlining any unnecessary elements.
It would be desirable to have a more regular tax system with a lower tax rate backed by a larger tax base, which would be more consistent, the lender believes.
Dr. Hanif Mughal said that the IMF, economists, and Muslim League (N) favored privatizing PIA and other institutions at that time. Still, the People’s Party had become an obstacle.
PPP has proposed a public-private partnership, which is not feasible. In such a situation, there are concerns about the government’s privatization of ailing institutions, which could strain relations with the IMF.
He said that if the reform process is obstructed, the new agreement with the lender may go sour.
