Former Finance Minister Miftah Ismail believes that Pakistan will have to get another bailout program from the International Monetary Fund (IMF) after the current one ends.
The former finance minister said that Pakistan can avert the risk of default if the international lender agrees to restart its existing program.
The PML-N leader said that the risk of default would not be reduced without the IMF’s support. He explained that the increased demand for the dollar is due to the purchase of it to avoid the fear of default.
Ismail said that Pakistan received more aid than expected during the Geneva conference and this would allow Islamabad to negotiate more comfortably with the fund. Additionally, Saudi Arabia and China can be approached for new loans.
The former finance minister said that the financing gap has widened but it will shrink automatically. He said that gas tariff has not increased since September 2020, so now is the time to pay higher tariff for industries like fertilizer and cement as well as rich consumers.
He said that increase in gas tariff is inevitable even if the IMF does not impose this condition as a condition.
During the International Conference on Climate Resilient Pakistan in Geneva on Monday, Pakistan received $10.7 billion in flood relief pledges, well above the target of $8 billion, pledged by Prime Minister Shehbaz Sharif. After the launch of a dollar flood relief appeal, which aims to help the country cope with the widespread. Devastation caused by catastrophic floods.
On the shortage of dollars in the country, Miftah said that Pakistanis are investing in dollars instead of property. He added that when the risk of default is over, the demand for the dollar will automatically decrease.
The PML-N leader said that the day the country signs an agreement with the IMF, most of the country’s problems will end.
Every time, the default risk is postponed for four weeks with the inflow of $1 billion, Miftah said, adding that remittances have fallen by 10 percent.
He said that in such a situation there will be no problem with the increase in the value of the dollar. He remarked that the value of the dollar is artificially fixed at 227 rupees while the fair value of the dollar is 260 rupees.
The former finance minister said that if we reduce the default risk, the rest of the problems will be solved automatically.
Gone are the days when we could get new loans. Now we have to pay back a huge amount to the world, Miftah said, adding that the IMF gives concessions through negotiations. The UAE has pledged $2 billion with the IMF board, he said, adding that it is difficult to talk to the global lender without resolving the exchange rate issue.
Miftah said that businesses in the country will not go for exports until the customs duty is reduced. He hinted that the country would have to go for another IMF program in June and added that it was better to take new loans than to defer loan payments from friendly countries.
The former finance minister said that Pakistan can talk to Saudi Arabia and China for new loans.
