Global lenders reluctant as stagnant economy hampers debt repayment: Miftah

Global lenders reluctant as stagnant economy hampers debt repayment: Miftah. As the country struggles with the balance of payment crisis, former finance minister Miftah Ismail said that the global lenders are reluctant because the economy is not growing enough to pay off its debt, media reported Thursday.

Miftah — while speaking at a German-Pakistan Business Gathering —  said: “We owe $100 billion to the world with the debt obligations of $22-24 billion every year. Besides, the enormous domestic debt obligation, the country has to pay debt of Rs6,000 billion this year.”

The former finance minister — who was removed from the office by the ruling alliance after Ishaq Dar returned to Pakistan in September last year — emphasised that Pakistan has no option but to revive the International Monetary Fund (IMF) programme for the sake of uplifting the economy.

Miftah spoke at length about the state of the governance system and state of the economy and pointed out that our institutions are not working and are elite-controlled.

“Possibly, Pakistan has the most ineffective governance system and its judicial process takes too long to dispense the justice,” he lamented.

The former finance minister pointed out the problems in contracts, which have made business difficult in Pakistan.

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Miftah — who has been drawing attention towards the out of school children — questioned how Pakistan can develop when 50% of the children were not in schools, whereas a huge population of children was stunted in the country and malnourished.

He went on to say that population growth is another big issue and every government tried to put a check on it, but no one succeeded. “Pakistan has seen martial laws and democratic governments, but none of them were able to improve governance,” he lamented.

Miftah also deplored that the world has moved ahead, whereas Pakistan lagged behind and pointed out that Pakistan and Vietnam had almost equal exports in 1992.

But now the stories of the two countries are different. “Vietnam has secured $300 billion exports and Pakistan would be able to fetch only $27 billion exports this year,” he said.

The former finance minister said that though the economy is not in a good state and in short-term things are very difficult, on the local front the economy is functioning, “it is only the dollar-part of the economy that is disturbed due to a shortage of foreign exchange reserves”.

“We should shift our focus to exports to set the path towards development in the next two to three years,” Miftah said, pointing out that Pakistan’s strength lies in its manpower and the country should focus on it to improve it for sustainable growth.

To solve the faults of governance, Miftah proposed the creation of more provinces. He said that each division should be given the status of a province to transfer powers at the grassroots level. He also urged for focusing on education as the key to development.