Pakistan Finance Minister rubbishes reports of suspected default

“There’s no way Pakistan is going to default,” he said while speaking to investors at the ceremony to mark the listing of Pakistan’s first developmental real estate investment trust scheme on the stock exchange.

Islamabad: Pakistans Finance Minister Ishaq Dar has rejected claims by former Prime Minister Imran Khan and economists that the country is moving towards a default and bankruptcy in the coming weeks.

He emphasized that despite being in a tough financial position, Pakistan will not default and will also be successful in getting the next tranche of the International Monetary Fund (IMF) and remain in the IMF’s Extended Funding Facility (EFF) program in the coming days.

“There’s no way Pakistan is going to default,” he said while speaking to investors at the ceremony to mark the listing of Pakistan’s first developmental real estate investment trust scheme on the stock exchange.

“We are in a tight position. We don’t have $24bn in foreign exchange reserves that out last government left in 2016. But that not my fault. It’s the system’s fault.”

Dar said that even though Pakistan re-paid at least $1 billion Islamic bond before maturity earlier this month, the “pseudo-intellectuals” continue to forecast that he country is headed towards a default.

The Finance Minister also lashed out at the former premier for opting to petty political tactics to undermine the government and its tenure in power, which he said is hurting the country severely.

“We are our own worst enemy,” he said.

Dar’s hit out at various economists under the tagline of “pseudo intellectuals”, seems more targeted towards the former Finance Minister of his government Miftah Ismail, who have recently been very vocal on television interviews and newspapers articles, about possibilities of the country’s default.

Miftal Ismail was asked to step aside and make way for Dar in September, when the latter returned to Pakistan after self-imposed exile in the UK.

Despite the looming financial crisis, hurting Pakistan, coupled with its failure to meet the tough demands of financial reform by the IMF, Dar is not only wishfully certain that Pakistan will not default, he is all praise about himself for steering the country out of the threat of a default, which he claims is a result of his financial witchcraft abilities.

Earlier, Dar had slammed the IMF for not completing the ninth review of the EFF and delaying the next tranche.

“If IMF team doesn’t give us month, I don’t care. We will manage,” he had said during a television interview.

But this is a fact that IMF has set forth tough conditions for Pakistan to implement, which include the floating free fall of the Pakistani rupee against the US dollar.

The IMF has asked Pakistan to not use artificial means to hold back the rupee value and leave it to the market exchange to decide.

Moreover, it has also asked the country to give better clarity on the flood damages, rehabilitation and reconstruction estimates, which is coupled with another demand to increase the per unit prices in the energy sector.

But Dar believes that many demands of the IMF are uncalled for and unreasonable.

“We shouldn’t put more burden on people either if we cannot give them relief. Pakistan cannot be held hostage to dictates of others.

“The external account is the biggest challenge and the government is trying to improve the situation. We have identified more external resources and inflows. We will be in much better position with respect to the external account and reserves by the end of the fiscal year,” the Minister insisted.

The Minister’s stance seems to be positioned more towards an exaggerated wishful approach, as per many economists, who believe that revival of the IMF plan and meeting up to the demands for the release of EFF tranche is directly linked with the release of financial support from many countries.

And experts believe that this is the reason why Dar’s rigid positioning against the IMF is having direct impact on the fast increasing threats of default for Pakistan.



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