IMF loan necessary to avoid default


The Pakistan Economy Watch (PEW) on Tuesday said the country will go back to the Stone Age if IMF loan was not ensured without further delay.

Timely closure of the markets will help the country save almost three billion dollars in oil import bill, it will reduce loadshedding, control circular debt and there will be no need to set up expensive power plants hastily, it said.

Early closure of markets is in the national interests which is being ignored for the sake of political interests, said Brig. (retd) Aslam Khan, Chairman PEW.

He said that market closure by sunset would help run the textile and other export industry as the textile sector is expecting a fifty percent reduction in exports after a 26 percent increase last year.

Reducing power supply to the industrial sector will also cut production and result in unemployment, he warned.

A country with a trade deficit of 48 billion dollars, a current account deficit of 15 billion dollars, and exports worth 31.85 billion dollars against the imports of 80.5 billion dollars cannot afford such luxuries, he said.

Aslam Khan noted that the existing policies clearly reflect that no lesson has been learnt from the bankruptcy of Sri Lanka and we are marching in the same direction.

Pakistan’s power generation capacity is more than demand but the whole country is facing severe loadshedding. Mismanagement has pushed up the power shortfall to eight thousand megawatts which has not been reduced to 6000 megawatts due to rains, he informed.

He said that IPPs got excess payments of Rs850 billion during the last fiscal and they would be given Rs1440 billion in the ongoing fiscal for which masses would be made to pay.

Preferring politics over the economy will continue to damage the country and may lead to bankruptcy, he warned.