May 24, 2022
ISLAMABAD – Finance Minister Miftah Ismail said on Monday that he would convey to the International Monetary Fund (IMF) that fuel and energy subsidies — which were introduced by the previous PTI government — could not be reversed as the “nation cannot endure it”.
Ismail, who is due to leave for Doha today to participate in talks with the IMF for the resumption of a $6 billion loan programme that has been stalled since early April, told mediapersons in Karachi that Prime Minister Shehbaz Sharif and PML-N supremo Nawaz Sharif had ruled out the possibility of ending the subsidies.
He said that according to the deal finalised by former finance minister Shaukat Tarin, Pakistan would have to raise the price of diesel by over Rs150 and petrol by Rs100. “It will not happen. I have refused. Shehbaz Sharif sahb has refused. Nawaz Sharif sahb has refused,” Ismail added.
“I am assuring you that I will not agree to [the terms] that Shaukat Tarin agreed.”
The PTI had announced a four-month freeze (until June 30) on petrol and electricity prices on February 28 as part of a series of measures to bring relief to the public.
The PML-N had severely criticised former prime minister Imran Khan’s government for “derailing” the IMF programme through these subsidies but despite being at the helm for over a month, it has not reversed them. The finance minister has repeatedly said these subsidies are not feasible and are costing the government billions.
The IMF has made the resumption of its programme with Pakistan, along with a $2bn expansion, conditional on the reversal of these subsidies.
A team comprising State Bank of Pakistan and Federal Board of Revenue officials, as well as Minister of State for Finance and Revenue Dr Aisha Ghous Pasha and the finance secretary, are already in Doha to negotiate with the IMF.
The talks began on May 18. At the time, Ismail had told the IMF that the government understood the current economic crisis and agreed that it would have to take “tough decisions” while mitigating the effects of inflation on middle to low-income groups.
Ismail told the media today that he would be joining the policy-level talks that would span two to three days.
Imran and his finance minister Tarin were responsible for Pakistan finding itself in a difficult place with regards to the IMF agreement, he claimed.
“They promised the IMF that they would not only remove [subsidies], but also impose a 30 per cent tax on it,” Ismail said. However, “my prime minister has said that the people of my nation cannot endure this hike.
“So, I will go to the IMF and tell them that yes, I agree that Shaukat Tarin made this agreement. But this nation cannot endure this (end to subsidies) and ask them to give me a break.”
He alleged that the previous government had agreed to the conditions with the IMF “deliberately so that I find myself in a difficult position today”.
However, he would return with “good news”, the finance minister assured.
“I will tell the IMF to give me in writing what they want and that I will speak to my boss in Islamabad,” Ismail said. “I will come back after finalising matters with the IMF and bring good news.”
‘Talks held in Doha because of PTI’s sit-in’
Ismail said that in the past, the IMF team would visit Pakistan instead of a government team going to another country for talks since terrorism had reduced following operation Raddul Fasaad.
“But the IMF communicated to us two to three weeks ago that their team would not visit Pakistan as they were wary and said a sit-in would be staged in Islamabad by Imran Khan,” he said, adding that he had not shared this information at the time. “I believed that we would be able to convince them to come to Pakistan.”
He added that he was amazed when the IMF told him about the sit-in plan as he was unaware of it at the time.
The minister explained that holding talks in Pakistan would have made things easier as he would have been able to consult PM Shehbaz and others from the incumbent government. “But now I will be consulting them on phone.
“This not the first time that Imran Khan hampered a visit by foreigners,” he said, recalling that Chinese President Xi Jinping had to postpone his visit to Pakistan in 2014 because of the PTI’s sit-in in the capital.
“Imran Khan has always prioritised his personal politics over Pakistan’s interest,” he added.
The finance minister slammed the former prime minister, accusing him of corruption and facilitating the corrupt, particularly naming Farah Khan, a close aide of his wife Bushra Bibi.
Ismail also berated the PTI, specifically Tarin, for the previous government’s economic policies and went on allege that his predecessor had been lying about leaving behind funds in surplus.
He further implied that the economic growth of around 6pc was wrongly “depicted” by the PTI and added that the IMF was not saying that growth needed to be slowed down. “This means that we will have to increase the interest rate because of Shaukat Tarin.”
Denies asking Tarin for help
The finance minister also lashed out at Tarin for saying that the incumbent government had approached him for help.
Tarin claimed yesterday that the PML-N-led coalition government had sought his expertise to lift the crumbling economy, but he refused to do so until a caretaker setup is installed and fresh elections are announced by Prime Minister Shehbaz.
“We have no hope for help from you,” Ismail said. “The one who cannot be [loyal] to his country, how will he help the PML-N?” he added.