Lahore: Taking pride on his economic proficiency, Finance Minister Ishaq Dar said in a statement issued on October 1, 2015 that Pakistan’s foreign exchange reserves had crossed an all-time high mark of US $20 billion. But, economic experts do not depict so positive future of Pakistan and believe that the country is crawling towards Greece Crisis like situation. .
The minister said, “The level of foreign exchange reserves was a manifestation of the stability in the national economy that had been achieved due to the deep-rooted and comprehensive economic policies and reforms undertaken by the present government during the last two years.”
Dr Ashfaq Hasnat of the Advisory Economic Panel in the government told News Lens Pakistan that both International Monitory Fund (IMF) and the government of Pakistan were working together to push the country towards an economic slump.
“We are heading towards Greece debt crises, but the successive governments are not paying heed to any warnings and have failed to understand the gravity of the situation,” he averred.
Hasnat said the Euro bonds were floated in the market against the advice of City Bank, Douche Bank and Standard Charted Bank, as they argued that it was not the right time to float them.
In his press conference on October 7, 2015, Finance Minister Ishaq Dar said after the devaluation of Chinese currency, the decision was made on the advice of Prime Minister Nawaz Sharif to test Pakistan’s reputation internationally. “It was highly urgent to float bonds irrespective of the market situation,” he added.
However, Dr Hasnat dispelled impression that the market was already crumbling. “The turmoil was already in the market since August and to say that the turmoil hit the market when they enter is a wrong impression,” he noted.
“The government sought proposal on July 21, 2015, the banks were asked to bid as financial advisers on August 21, three financial advisers were selected on August 24, a kick-off meeting was held on August 27 to devise a strategy on how to go to market, they were in market on Sept 18 and the deal was made on Sept 24,” Hasnat said.
Former Governor State Bank of Pakistan Shahid Karowar does not see any reason to avail loan against such a high mark up. “The recent market situation does not favour any such adventures,” he told News Lens Pakistan.
Former Finance Minister Dr Hafeez Pasha said that the turmoil triggered by the devaluation of Chinese currency does not allow to float bond in the market. “Had the situation been better, Pakistan would have drawn a recovering deal,” Pasha observed.
Former adviser on Finance Saqib Shirani told News Lens, “I would blame the IMF as well for issuing such bonds to Pakistan given the fact that Pakistan’s foreign reserves were already thriving and there was no need to release further money.So, where is Pakistan heading towards? Bailout Package or a Greece-like debt crisis? “
The IMF lending always comes with a condition to dictate the economic policy of any country on the receiving end. It doesn’t allow the government to give subsidy on utility bills.
Not very different views were of the PML-N leader Anwar Beg who quoted a Western diplomat as saying that Pakistan would have to pay a very heavy price if any bailout package was availed and therefore, it’s more suitable for Pakistan to be self-reliant and stay dependent on its human resource.
“A Western ambassador warned me against foreign loans, citing them counter-productive to Pakistan’s future economic stability,” Beg said.
Anwar Beg opined that Pakistan could cash in on its human resource in shape of employment in the Middle East. “If we market our human resource effectively, we can earn one billion dollars a month, and in a year we can pay off all outstanding loans and bid farewell to the IMF,” he suggested.
Anwar Beg showed serious concerns, saying that Pakistan would have to pay very high price for such mistakes. “Pakistan will have to compromise on its nuclear program if the debt keeps piling up,” he added.
According to Pakistan Tehrik-e-Insaf central leader Asad Umer, the Nawaz government has availed the most expensive loan with the highest coupon rate of 8.25% in the history of Pakistan.
“Just to give the impression that Pakistan’s foreign reserves are all time high, the government has committed economic suicide,” he lamented, saying that Pakistan would have to pay the heavy price when it won’t be able to return the loans.