Former finance minister Miftah Ismail said on Thursday that Pakistan needs the International Monetary Fund (IMF) to avoid default.
While having a pre-budget discussion at Salim Habib University on Thursday, he warned Pakistan is going through a very difficult economic period and that the country lacks the resources to pay its debts.
He said, “We have to go to the IMF program, if we don’t go, we will default and no one in the world will give us loans”.
Miftah said the majority of Pakistan’s problems were homemade, and breaking out of the economic rut will take time.
The former finance minister pointed out that the country needed to take out new loans due to a lack of revenue in order to pay off the interest on previous loans. He went on to say that when a country borrows to pay off previous loans, the country’s debt becomes unsustainable.
Miftah highlighted that Pakistan’s economic problems were caused by governments and the IMF was not to blame.
He implored that more economic issues will arise in the country, and “we must draw lessons from them”. He further called on that the minimum wage be raised in the upcoming budget due to Pakistan’s record-high inflation.
Miftah mentioned that Pakistan’s inflation rate is higher than that of India and Bangladesh. He rejected the notion that all inflationary pressures are caused by global headwinds. It was Pakistan’s policies that were to blame.
The former finance chief demanded additional powers be transferred to provinces, citing the need for increased competition for better performance. He demanded that all political stakeholders in Pakistan convene to discuss the best course of action to save the country from its current economic crisis.