Dear Ishaq Dar, your statement is beyond the comprehension of this nation

Published: August 2, 2016
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Pakistani Finance Minister Ishaq Dar. PHOTO: AFP

The political stunts of Mr Ishaq Dar, Federal Minster for Finance, can be attributed primarily towards the unrest in the country and average conclusion that the debt from International Monetary Fund (IMF) actually translates into submission to US desires.

The extracts from the interview are given below,

“Pakistan will soon stop looking towards IMF for assistance. The last session with IMF is underway right now.”

He went on to say that by 2050 Pakistan will become the 18th biggest economic nation across the world.

It is imperative to note in the world of finance which is governed by cash flow management or balance sheet adjustments, the word ‘soon’ needs to be quantified  especially when it boils down to the commitments of  Pakistan Muslim League-Nawaz (PML-N). The country was supposed to be free from load shedding in three months which now has been changed to five years; the ground reality suggests that it is not happening as usual it was a political stunt to get maximum votes at the time of elections.

On the contrary, one should visit the website of IMF to find out what is happening,

Summary: A 36 month, SDR 4,393 million (216 % of quota) Extended Arrangement under the EFF was approved by the Executive Board on September 4, 2013 and the ninth review was completed on December 18, 2015, for a total disbursement of SDR 3.6 billion.1 The 11th tranche amounting to SDR 360 million will be available upon the completion of this review.”

The publication date is April 1, 2016.

It may be concluded that the latest stunt of property tax may be looked upon as a bridge finance to avert further borrowing.

The current regime has embarked upon setting up power projects and has made another political stunt by claiming that Chinese investment is here. It might be news to readers that each investment project is backed by sovereign guarantee of government of Pakistan – these in pure finance terms are called debt.

The projects being setup are on the strength of the government of Pakistan guarantee rather than the investment climate of the country. It may not be out of place to claim that any individual can get any amount of investment from any part of the world provided the initiative is backed by a government of Pakistan or even a local bank’s guarantee. The nation should comprehend that the repayment on each loan is guaranteed which is inclusive of interest repayment as well.

PML-N has played its cards well as they are sure of their failure in 2018 elections and any political party taking over will fail with a maximum period of 24 months resulting in the return of PML-N and we shall then witness the commencement of a mega media campaign on liquidity/reserves level converging into abnormal increase in inflationary pressures via indirect taxation.

The perspective being produced here is of any sane Pakistani and we are aware that all the projects being targeted are under implementation stages which is generally between 18 to 24 months and the repayment burden will fall on the next regime.

Pakistan Total External Debt 2002-2016 | Data | Chart | Calendar

External debt in Pakistan increased to $69558 million in the first quarter of 2016 from $68452 million in the fourth quarter of 2015. External debt in Pakistan averaged $50374.16 million from 2002 until 2016, reaching an all-time high of $69558 million in the first quarter of 2016 and a record low of $33172 million in the third quarter of 2004. External debt in Pakistan is reported by the State Bank of Pakistan.

It is difficult, if not impossible to conclude that the ever growing debt is leading the country towards bankruptcy. Martial Law is ‘not’ in the offing only because of the financial health of the country otherwise soldiers would have been at the helm of affairs.

The army leadership is in a fix as the popularity gained in the northern part of the country will be tarnished in the federal capital if they ever make the mistake of takeover. The heavy debt services in the next decade will be a testing time for the country.

The ultimate ‘tragedy’ is that Pakistan has been put under lien to China for making up the shortfall in the power sector but no one has bothered to see the recovery rate of DISCOs. The sale of electricity is a loss making business in the country which is governed by kunda culture and electricity theft. I am afraid that maybe if all the power projects are commissioned, we will end up having more electricity than we can afford to pay for and the government of Pakistan will be doing the deficit financing.

My dear Federal Minister for Finance, your statement is beyond the comprehension of this nation.

SH S

SH S

The author likes to write about finance.

The views expressed by the writer and the reader comments do not necessarily reflect the views and policies of The Express Tribune.

  • Bana Pst

    And the best comedian award goes to Mr. DarRecommend

  • vinsin

    Pakistan future depends on Chinese funding, oil and gas future etc.Recommend

  • Humza

    Give the devil his due. Political leaders and ministers all over the world typically give over optimistic reports of their achievements. In the case of Ishaq Dar, he has transformed Pakistan’s economy for the better in 3 short years if you were to ask even independent western analysts . Financial agencies in the US and Europe from Moodys to Standard and Poors and even financial papers are positive on the Minister for Finance’s work. Why else has Pakistan’s economy been upgraded and the world is now speaking about Pakistan set to become a middle income country. Pakistan stands as one of the exceptions in the Muslim world where there is economic uncertainty everywhere but for whatever reason Pakistan seems to be stabilizing and improving under the current administration. Every month I learn of some new improvement like the doubling of IT exports and more IT start ups. Whatever Mr. Dar is doing, it is working by the reasoning of independent analysts who have nothing to do with the Pakistani government. 10 years of Musharraf gave not one KW of electricty and 5 years of Zardari gave little improvement but 3 years of Nawaz Sharif has turned the country around in the eyes of the world. That’s what matters and that’s why Pakistan seems to keep improving so I’ll let the IMF comment slide!Recommend

  • Paki Terrorist

    It is actually simple … this is admission of the fact that Pakistan can no longer meet the conditions of the IMF loans. However, the loans already taken, have to be returned with interests, which Dar did not talk about.Recommend

  • Predictor

    People should avoid investing in stocks. It is clear gamble,,. Before investing kindly check return on investment , Capital employed, P/E and EPS, You will find the current stock market is only gamble and trap with market going up and businesses with profits going down.Recommend

  • Tommy Gunn

    Mr. Dar is in the wrong profession. He would make a very good comedian!Recommend

  • H Ch

    Spare the nation please from your opinion Mr. Op Ed writer.Recommend

  • Parvez

    Nicely said….to understand the situation a bit more its worth reading a book called ‘ The Confessions of an Economic Hit Man ‘ ( its not fiction ) by John Perkins.Recommend

  • Omar Dar

    Of all the political parties, the PMLN has the best chance of dominating the 2018 elections at the moment. So there is no evidence the only goal of the government is to set up the next party to fail under a high debt load. With regards to the current development works and the finance minister’s statement, it looks absolutely fine to me. I would like to emphasize that, among other things, it is the duty of the finance minister to build up confidence in the private sector with regards to the financial health of the country. He has said that the government will, if everything goes to plan, not need to go to the IMF after this program. Perhaps Pakistan can decline to take the remaining tranches? What’s wrong with that? Do you want him to say that Pakistan is bankrupt? This will destroy everything and everyone more quickly than anything anyone can ever imagine. It is funny that some sections of the society will do everything, and that includes burning down the country, just so their favorite smartly dressed leader can assume the chair. Didn’t PTI pull a similar stunt with its promise to wipe out corruption in 90 days? For the rest of the article, I would like to clarify that the issuance of sovereign guarantees is a common procedure for the national projects. This is done to ensure that the project is completed on time and if some political party, for its own petty interests, tries to topple the government, it too will be held responsible for completion or else return of the money. In any case, the agreements I have seen are of a BOT type, which means that the projects will be financed by the revenue they generate. So there is no burden of debt repayment at all. The plan of PMLN seems to be, and it looks like a good plan, to ensure investor confidence by improving security and infrastructure, which will then kick start the economy. Once the economy is running, we can move to development programs. At the same time, they are actively trying to reform things like the tax system, which has never been done before and that will level the field for everyone. Perhaps we should look at the glass half full, friend.Recommend

  • Adix

    Criticism is the easiest thing to do.. you have criticized the IMF loan and other Government measure but you have not suggested any better road map that Govt can follow in order to avoid IMF. By reading you blog its show that you are on the PTI payroll.. please write for the betterment of Pakistan..Recommend

  • Maria

    I think Dae has done a decent job of improving Pakistan’s economy. Look at how the rupee has become stronger compared to other currencies in the world.Recommend

  • PatelPara

    Seriously?Recommend

  • Maria

    If you buy and send money overseas, you will see that the Pakistani has not only maintained its value against the dollar but it has increased in value against other currencies. Go check rates for the last three years.Recommend

  • PatelPara

    Seriously? I live outside Pakistan. Explain this to me with stats. I could be wrong.Recommend

  • Maria

    Sure.Look it up. Last year you would get 86 rupees for one Canadian dollar but now you hardly get 78 rupees per dollar. Just a few years ago we would get over 100 rupees per Canadian dollar! Not good for people in North America sending money to Pakistan who used to get more money but good for Pak economy. Not only is Pak rupee ok against many Western currencies but it has actually strengthened.Recommend

  • PatelPara

    by that I meant some article or some news that shows how Pak rupee has got stronger against usd. What you are saying goes up and down. Can you share some news clip or something?Recommend

  • Maria

    Here is a link to show how the Pakistani rupee has become stronger relative to the Canadian dollar over the last 3 years. I don’t know what you mean by up and down but it can be seen from any money changing site that the Pak rupee has gone from 1 dollar = over 100 rupees three years ago to 1 dollar = 80 rupees now. Since you live abroad you can check the exchange rate where you live to show similar trend of stonger and stable rupee. Check Glaxy exchange which lots of Pakistanis use – we all get get less rupees for Canadian dollars.
    http://fx-rate.net/CAD/PKR/Recommend

  • PatelPara

    oh so I guess w.r.t. canada it only got better?. Here in USA I know for a fact that its been around 99-104 in the past 5 years.Recommend

  • kashur

    Dar—– the real economic hit man of pakistanRecommend

  • Hajishabib

    I am a senior citizen and served for nation 42years as ENGINEERING SUPERVISOR P.T.C.L and earned BILLIONS OF RUPEES including FOREIGN CURRENCY since 1985 to 2009 till retirement with my honest and hard workers who are working in international gate way exchange Karachi.MR ISHAQ
    dar who proved as corrupt,to PAKISTAN money laundering.
    and since eight years passed the poor pensioners 40000,including 15500 WIDOWS not paid half pension by such dishonest and unkind MINISTER also he is ever telling on world economic forum.Also the courts S.C AND HIGH COURTS
    are not helping in our 100%case delaying since last seven years and proving
    JUSTICE DELAY JUSTICE DENIED.

    Ishaq Dar’s “Best Finance Minister of South Asia” fake? Shocking reality behind PML-N’s claim

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    Haider Ali Sindhu
    October 14, 2016 10:37 am

    Ishaq Dar Spent Half Million Dollar on Son Marriage

    Naveed Shamem 4:04 PM

    If Pakistan People Party is Famous For Its Corruption
    and Spending on Wrong things other Political Parties like Muslim League
    N and Muslim League Q are also not behind from People Party. Recently
    Senator of Muslim League N Mr Ishaq Dar done marriage of his son in Costliest Hotel of Dubai that is one of the most famous and Expensive Hotel of The World. Ishaq Dar
    Spent more than Half Million Dollar on the marriage of his son which is
    equal to 45 Lakh Pakistani Rupees. Pakistani Pubic is dying with Floods
    and Looking for Food and our Politicians are Spending Millions of Their
    Marriages.
    Recommend