Economy passing via critical juncture, Pakistan needs relief from PTIMF: Sherry Rehman

Pakistan Peoples’ Party Parliamentary leader in the Senate, Senator Sherry Rehman has said that the economy of Pakistan is passing through critical juncture of country’s history due to controversial and non-transparent agreement of Pakistan Tehreek-e-Insaf (PTI) government with IMF and Pakistan needs relief from PTIMF. In a statement issued here on Wednesday, she said that Tabahi Sarkar wreaked havoc on the Pakistani street by unleashing a slew tsunami of unbearable utility and food staple price hikes. The indirect taxes from Rs 1000 to 1300 billion will add to dangerous levels of inequality. It has also indebted Pakistan to the point of crisis, and has now taken us into a situation where the federal bank is being made totally unaccountable to Pakistan’s parliament or people. Sherry Rehman said that the PPP has always dealt with the IMF but in entirely different terms, where the market alone cannot ruthlessly determine prices, driving millions into poverty, homelessness and joblessness in the name of stabilization goals. We had also given the State Bank reasonable autonomy to make monetary policy, but never proposed opening up the county to the ups and downs of international capital and its dictation. The PPP leader in the Senate said, “What we see today is a very worrying meltdown without any matching capacity for increasing direct taxation or actually widening the tax net. As a result, today we are totally exposed to debt, impoverishment and mis-governance on an epic scale. From Rs 12.5 trillion, our total debt has reached 44 trillion rupees (around 90% of GDP), circular debt is expected to skyrocket to a whopping Rs 4.6 trillion in 2023.” Foreign Direct Investment (FDI) is down by 30% and the World Bank estimates only 1.3% GDP growth this year which is the lowest in the region. If this was happening in another country, the government would have resigned on their own, she added. Sherry Rehman said, “Tabahi Sarkar’s tax target for the next fiscal will shift the major tax burden directly on the vulnerable who are already struggling at the bottom of the social pyramid. Under the IMF deal, FBR will increase indirect taxes by a massive Rs1.272 trillion (almost 2.8% of GDP) in the coming budget and the government will continue increasing petroleum levy on oil products to the maximum level (Rs30 per litre) this year and next year to collect about Rs510 billion this year instead of budgeted target of Rs450 billion, which will have downstream inflationary impacts on every item including food staples.” She said the World Economic Outlook (WEO) 2021 report has projected unemployment rising by 0.5% to 5% during the current fiscal year. This is the same government which promised 10 million jobs and 5 million homes. What happened to that? People are now struggling for their basic needs. The PPP leader in the Senate said that according to PBS’s Sensitive Price Index (SPI), prices of 18 essential food items have been hiked this week. Average Food inflation hovers around 18.7% which is the highest in South Asia. Instead of providing relief before Ramzan, Tabahi Sarkar continues to burden our people with extreme Inflation which has reached a seven-month high, and in March, it rose to 9.05%. All over the world, governments give special relief to people in this holy month but Tabahi Sarkar is too busy criticising the opposition to care, she added. The Senator said, “To this point we have not heard from PTIMF what the terms for the new agreement are. All we know is that the government is bending backwards to comply with IMF’s tough conditions; imposing around Rs 1000 to 1300 billion additional indirect taxes in the upcoming budget and hiking electricity tariff by Rs5 per unit till June 2021. Do they even realise the consequences it will have on people? How does the government plan on tackling this?” Sherry Rehman said that despite a historical dip in international oil prices, the government is constantly increasing petrol prices. During PPP’s government, international crude oil was +$140, yet the situation was nowhere close to what it is now. It is shocking how the PTI-led government has almost doubled its reliance on petroleum levy as a source of revenue. Why have petrol prices been reduced by only a minuscule Rs 1.5/litre? International oil prices are at lowest since a decade, hovering around $65/barrel. With 5 big petrol hikes already in 3 months of 2021, this minor price change gives no relief to the people. Pakistan has suffered losses worth Rs 220 billion due to late LNG import and our industries are crippled due to the recent hike in gas prices, she questioned. Vice President PPP Senator Sherry Rehman concluded by saying, “Our economy is on a ventilator, the government seems to be in no mood to order vaccines and one after the other, our state institutions are being destroyed. What happened to accountability? Clearly the government is exempted from it in this Naya Pakistan. Taking notice of inflation is not enough, what the country needs is swift action and a solid economic policy. People should not be paying the price for the incompetence of this Na Ehl Sarkar.”