By Senator Rehman Malik
PAKISTAN has been suffering continuously since FATF decided to put Pakistan on Grey List. The Grey list acted like a poison to our economy as the Grey List is a direct anti Pakistan message to the international banking, financial institutions and other governments discouraging them not to deal with Pakistan.
Investors have shied away from Pakistan and are not investing in Pakistan.
Let us recall the efforts of the PPP government while the president Asif Ali Zardari was on the helm of affairs and instead of FATF he created a group of friends of Pakistan and called the entire world leaders and financial intuitions to help the Pakistan economy. This made the Pakistani economy stronger and foreign exchange reserves went up with action against Hundi dealers as well. Khanani and Kalia International being one of the biggest foreign exchange companies was dismantled by the PPP government as it turned out to be a major Forex scam. It was great a help and message which sharply increased the reserves. I under the instruction of president Zardari increased the action against dollar mafia and did not allow dollar to go beyond rupees 90.
Now it is unfortunate that FATF is continuously sending very strong signals and working in partnership with mighty IMF. We now have an inimical forum instead of having a friendly forum for Pakistan the way it used to be in the past.
The above negative factors against Pakistan actually locked the international dealings with the propaganda of terrorist financing and money laundering creating a feeling of scare in the world to avoid financial dealings with Pakistan. IMF is controlled, run and handled by the same masters who handle FATF and it is being supported by India to style his own inimical agenda. America was lobbying for help to Pakistan and now the same Americans are lobbying against Pakistan in FATF & other international forums.
The clear nexus can be witnessed from the very first year of five years tenure of this government where mighty IMF very strongly started direct and indirect interference in the fiscal system of Pakistan. Every meeting with IMF involving Minister for Finance or Prime Minister of Pakistan brought more burden back home with the increase in the prices including banks rates and unannounced compliance of orders of mighty IMF continued even before budget and weak attitude of the government kept on bowing to the ever growing demands of IMF.
IMF took over the driving seat of Pakistan economy and whatever they could not manage to get from the previous governments, they achieved through the present government. IMF had committed now total 12 billion dollars, out of which 9 billion dollars will go to debt servicing back to IMF. In fact it will not be wrong to say that IMF has almost become a financial regulatory body of Pakistan and besides dealing with fiscal matters IMF regularly gets the implementation of their conditions from the government. IMF used rupee – dollar parity as a major economic tool to destabilize the Pak economy and today the order of the IMF is the order of the day.
The poor economy of Pakistan with all its economic wizards has become a lame duck and it looks that IMF is pushing Pakistan towards deliberate default if the dollar price crosses 180 rupees, it will be impossible for Pakistan to handle the debt servicing / repayment of debts.
It is sad to note that the present government seemingly made the devaluation of rupee a part of their regular exercise having no remorse about its adverse effects. Following the month PTI took over the reins of this country as of August 2018, dollar exchange rate was 124 PKR which started being given an instant yet continuous push from October until today. In October 2018, dollar was closed at 133 PKR, whereas in the same month, it was given a quick rise to 140.60 PKR. While analyzing the situation, I had presented my first assessment on record that it would to cross 150pkr rate reaching an all-time high before the budget 2019 is presented and it actually went that higher.
The trouble didn’t end up there as after the dollar touched the rate of 150 before the budget, I had predicted again that it is going to hit further increase up to 160 to 165 post budget. We saw how the government took no step to stabilize the value of Rupee despite several economic indicators and predictions and carelessly kept watching it decline further. Due to the same lack of sense of responsibility on account of depleting economy, dollar has touched a new high of rupees 163 validating my predictions yet again.
The irony is that Pakistan has already mortgaged the most important buildings of Pakistan i.e. Three Airports, National Motorways (M2-M3 and M4) and buildings of Pakistan Television and Radio and many more
Our most of the national assets are mortgaged to the IMF, however depleting Pak Rupee will make it impossible for Pakistan to repay the debt and there is no hope that some friends would come to our rescue in order to bail out Pakistan in the present Economic crisis.
My only hope is China in this situation like if the Government plays wisely and acts on my earlier suggestions to request officially to the Chinese Government to buy our international debts of 105 billion dollars by giving us a relief of repayments for 5 years, our economy would be stabilized. In the meantime, we should reduce our inflation from 11 to 5 percent and raise our GDP growth from 3.5 to at least 5 percent in these five years. The Government should use the economic parameters and administrative tools to bring the dollar price down to Rs.115 at least. The government should stop borrowing any further from State Bank of Pakistan in terms of extra printing of bill notes which is again highly detrimental indicator to the economy of Pakistan. The government should adopt Turkish model to get rid of the national and foreign debts. I again warn the government to take maximum measure before Pakistan is declared as international defaulter which will be an irreversible damage & disaster for Pakistan.
Let us see if the government will be able to stop might IMF to play with the fate of common man.
Powerful dollar & Mighty IMF is playing unhindered in Pakistan and both are winning against the economically crushed common man.
(The writer is Chairman of think tank “global eye” & former Interior Minister of Pakistan. rmalik1212@gmail.com@GlobalEye_GSA)