'The Situation Is Tight, But No Chance of Pakistan to Default,' Claims Dar - Capital TV

May 28, 2023


‘The Situation Is Tight, But No Chance of Pakistan to Default,’ Claims Dar

Anum Razzaque

ISLAMABAD: Finance Minister Muhammad Ishaq Dar expressed his concerns regarding rumors of default, on Wednesday and assured the investors that the country won’t default.

Addressing the ceremony of the Real Estate Investment Trust (REIT), Dar noted that ever since he took charge of the office, talks of Pakistan going towards the default route are rife. “We hear every day that Pakistan will default. How will it default? There is no chance,” the finance minister asserted.

Slamming all such rumors, Dar emphasized that the country has a “beautiful future.”

He assured the investors, “There is no chance of Pakistan’s default,” acknowledging that the situation is strained because we have less forex exchange compared to 2016.

“Yes, we are in a tight [fiscal] position and we do not have $24 billion in reserves which [the PML-N government] left in 2016 but that is not my fault. The fault is in the system and we must ensure that everyone works together for Pakistan’s progress,” Dar said.

The Finance Minister said this is our responsibility to resolve the issues and we will work on it collectively.

“We are harming the country for petty politics”, said Dar while addressing the investors of real estate. “I can go against anybody in any discussion and I can prove Pakistan will not default. But we are damaging the country for petty politics and petty objectives.”

He noted that Pakistan’s dept-to-GDP is 72%, when he left, it was standing at 62%. Developed countries’ dept-to-GDP is more than 100%, despite higher dept-to-GDP no one said that the country is going on the path of default.

He claimed that we are our own worst enemies. Dar requested investors to know better and ignore the naysayers. He asked investors to spread awareness regarding the fact that Pakistan would not default.

‘Smuggling of Three Major Items’

Discussing the index, he said Arif Habib noted that the index is on 40,000. He reminded that at the time of the election of 2013 the index was 19,000.

He pointed out three things that are being done wrong: first is Pakistan smuggling greenback to a neighboring country. Secondly, the import of wheat. The third issue he pointed out is the smuggling of fertilizer. The government is selling fertilizers at a subsidized rate.

He told the investors that he has given directions to law enforcement agencies regarding the smuggling of these three items that have to be minimized and rather stopped, and they are doing their best.

Dar admitted that the interest rate is high. It is 16% in Pakistan, and this is a decision of monitory policy which is autonomous.

He cited an example of Turkiye where the policy rate is 9% and the inflation rate is 60%.

He described the high policy rate as the result of imported inflation, and the second reason is the devaluation of the rupee.

“I and our coalition government are not responsible for the experiences that happened in the past but we have to correct these,” Dar said.

IMF Programme

Dar assured he is committed to complete the program of IMF, noting that PMLN is the only political party in the history of Pakistan who completed the program of IMF.

“My team’s effort will be to complete the programme for the second time. But Pakistan’s people should not be taken hostage. We will do political management so that the burden on the public is reduced. Since I took over, my stance has been that if we can’t give relief, we should not increase the burden as well. We have delivered on our commitment on PDL (petroleum development levy) but we have reduced prices thrice,” he noted.

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