Ishaq Dar said US Dollars are being smuggled out of Pakistan on a massive scale, and sometimes the Government of Pakistan has no other option but to intervene in the market and support the rupee.
Addressing the Sustained Economic Growth forum in Islamabad on Wednesday, the finance minister said smuggling was a headache for the government, and certain speculators, gamblers, and the hundi mafia had taken the country’s currency hostage.
Dar said imported goods were being smuggled into neighboring countries. “There is a huge smuggling of US dollars; you buy coal from a neighboring country in rupees, the rupee comes into Pakistan territories in Peshawar, and they buy dollars by paying Rs. 15-20 extra,” he stated.
He claimed that in tough situations, central banks around the world, including the United Kingdom, Bangladesh, and India, acted quickly in the market and disbursed billions of dollars, a privilege that Pakistan cannot afford.
“Despite its challenges, the Government of Pakistan also has to intervene in the market. Aren’t other countries like Bangladesh not interfering as well? I think the multilateral [lenders] have to understand that this is neither the Bank of England nor the Federal Reserve that we can afford… because we have forex reserve constraints,” Dar argued.
In terms of curbing the impact of the informal currency market, Dar stated that the authorities have begun operations. “Customs caught a person smuggling $100,000 in the last 24 hours.”
Dar said the economic management of the country has been a complete disaster in the past four years. He claimed the domestic debt of the country had risen to an unbearable level of Rs. 54.5 trillion from Rs. 30 trillion, showing a whopping increase of over Rs. 24 trillion.
“Now, this is an unbearable increase in debt; what caused it? There are two reasons for this: our fiscal deficit has skyrocketed, and the rupee has been allowed to fall. As a result, we have increased our public debt by Rs. 4 trillion,” he said, adding Pakistan is also facing the problem of paying an interest rate on loans.
Dar underscored the importance of keeping politics separated from the economy. Citing the recent emergence of difficulties in policymaking, the finance minister said there was an issue with tax reporting in certain industrial sectors. “Pakistan needs to increase its scope of taxes,” he said.
Regarding the government’s talks with the International Monetary Fund (IMF), Dar said the lender had asked for financial data on post-flood rehabilitation projects. On the subject of whether the Fund would release the remaining tranche of $1.2 billion any time soon, Dar said, “it was up to the lender now, because beggars are not choosers”.
If Finance Minister can have meetings with President on political issues, he can surely hold meetings with Customs and Border Security to talk about smuggling. What use is in complaining, a minister should act like a minister, not complain like a common helpless man.
Chutiya saalay ne awaam ko phuddu lagaya hua hai