Ever since Imran Khan took over as Prime Minister, mandarins in government of Pakistan’s Finance Division have been working overtime in rebutting well-meaning and justified media criticism regarding the self-debilitating economic initiatives that are accelerating the country’s financial apocalypse. Though they have been doing this through a barrage of craftily worded “clarifications”, but instead of clearing up issues, these rebuttals invariably further obfuscate the same.
A classic example of this, can be found in its latest ‘clarification’ issued on February 24, 2022 and published under the caption- “News item published in “The News” that Finance Ministry may have misled ECC on KPP [Kamyab Pakistan Programme] markup subsidy allocation, is misleading” in its official website.
Declaring that the report carried by Pakistan daily “The News,” on KPP “reflects poor understanding of the [Kamyab Pakistan] Programme,” the Foreign Division has issued a clarification that reads- “The calculation of subsidies under KPP were based on certain assumptions and parameters while keeping in consideration targeted level of disbursements, mark-up subsidy, loan loss coverage along with other considerations as envisaged under the program.”
While this explanation may make good sense to those familiar with economics, but for the uninitiated majority, it’s Greek. Furthermore, by admitting that “These [disbursements] may or may not be materialised and actual outcome could be different depending mainly upon (i) actual loans to be disbursed under each scheme (ii) actual loan loss quantum (iii) guarantee structure as allowed under the program” [Emphasis added], the Financial Division has ended up endorsing the very same apprehensions that were being expressed by the media.
Unfortunately, with politicians within the ruling dispensation and financial experts shooting off their mouths, there’s little that Pakistan’s Foreign Division can do to effectively but allay public apprehensions. For example, in his Independence Day 2020 address, the Prime Minister boasted of how “Despite the [Covid-19] pandemic, our tax collection in June exceeded our targets”, and “even cited the record rise in the stock market as an enduring indicator of economic progress”. However, just three months ago, Imran Khan had shocked everyone by admitting that “Our biggest problem is that we don’t have enough money to run our country…”!
Just a month later, former Chairman of Pakistan’s Federal Board of Revenue Shabbar Zaidi endorsed Khan’s concerns on Pakistan’s economic crisis by saying, “We keep saying that everything is good, the country is running well, we have achieved great success and we brought ‘tabdeeli’ [progressive change] but this is wrong. In my view, the country is, at the moment, bankrupt.” [Emphasis added].
Though he later claimed being misinterpreted, Ministry of Finance Spokesperson Muzzammil Aslam expectedly took to twitter, rebutting Zaidi’s ominous contention with a rather clumsy observation that “… how do you figure out we are bankrupt?”. Someone needs to ask the Finance Ministry spokesperson that with its burgeoning external debt standing at a whopping US$130 billion and the government actively mulling over a proposal to borrow gold biscuits and bars from the people to increase Pakistan’s foreign exchange reserves as well its decision of granting permanent resident status to foreigners “in lieu of investment,” then, are more proofs of Pakistan being bankrupt are still required?
One had expected that in view of the country’s precarious financial condition, the Imran government would take the logical and inescapable step of tightening its purse strings. However, the cricketer-turned-politician who blames previous governments for the country’s economic woes has ‘cleaned bowled’ economic pundits the world over by announcing a cut of Rs. 10 in petrol and diesel prices as well as a reduction of Rs. 5 in electricity tariff. He even went on to boast of how despite the Oil and Gas Regulatory Authority’s recommendations of Rs. 10 hike in petrol and diesel prices, he had done just the opposite!
Not only this, Khan has also announced multiple sops that would put even the welfare schemes followed by the wealthiest nations to shame. He has increased in cash handouts under the ‘Ehsaas [Realisation] programme’ for poverty alleviation, and initiated a skill-based internship programme for graduates with a Rs. 30,000 stipend, as well as announced a 5-year tax holiday for non-resident Pakistanis who invest or set up industries in Pakistan.
Companies and professionals in the IT sector would be exempted from taxes and provided hassle free access to foreign exchange. While interest-free loans would be provided to the youth and farmers under the ‘Kamyab Jawan [Successful Youth]’ programme, subsidised house building loans would be given to those in the low-income group. Introduction of ‘Sehat [Health] card’ in Punjab would enable people from economically weak sections of society to get free medical treatment upto Rs. 1 million in any hospital.
Though the Pakistani Prime Minister has outrightly denied it, the general consensus is that these are financially unsustainable populist schemes necessitated by political expediency rather than Khan’s much touted desire of turning Pakistan into a replica of the welfare state established by Prophet Mohammad in Medina. Some even say that since his “Pakistan’s economic condition is better than India” jibe and “Pakistan is still one of the cheapest countries compared to the world” claim failed to assuage public anger due to the double whammy of galloping inflation and surging unemployment, offering sops was the only alternative.
Neither Khan nor his government has elaborated on how exactly would the humongous requirement of funds to finance these multifaceted and highly cash intensive welfare schemes would be met, save a solitary tweet claiming that “FBR [Federal Board of Revenue] has successfully knocked down Feb revenue target of Rs. 441 billion, posting robust growth of 28.5 percent, and up to the month growth of over 30 percent. Because of this performance of FBR we are able to subsidise petrol, diesel and electricity and give relief to our people.”
Pakistan’s external debt has recorded an unprecedented 20 percent rise in the first half fiscal year and currently stands at a walloping Rs. 21 trillion. This is why the extraordinary munificence being displayed by Khan, who had just three months ago lamented that “we just don’t have enough money to run our country,” is akin to a naked man offering his shirt and thus, unbelievable and downright suspicious!
Beleaguered by double digit inflation, rising unemployment and a rapidly depreciating Rupee, there’s no relief in sight for the hapless people of Pakistan. So, what remains to be seen is whether the public is taken-in by the Prime Minister’s grandiose but illusionary promises, which bear an uncanny similarity with the famous “let them eat cake” remark popularly attributed to Marie Antoinette.
Or, will the people call Khan’s bluff and rejecting these assurances, give vent to their collective anger and frustration by taking to the streets and bringing down his government?