PTI’s rupee devaluation policy devastating for Pakistan's economy: ex-commerce minister

• The former minister claims that mafias manipulating key decisions related to sugar, smuggling of wheat, LNG imports.
• The PTI's rupee devaluation policy has affected the economy
• Political economy remained a major cause of the PTI's failure 

ISLAMABAD: Former federal minister for commerce Khurram Dastgir Khan has criticised the massive rupee devaluation undertaken by the PTI government, which, according to him, has proved to be devastating for Pakistan’s economy.

In an interview with The News on Sunday, the PML-N leader claimed that the formula of rupee devaluation against the US dollar for boosting up exports had failed to yield the desired results.

Khurram Dastagir said mafias were manipulating key decisions related to sugar, smuggling of wheat, LNG imports and earned hundreds of billions of rupees at the cost of people of Pakistan.

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The senior PML-N leader said the second formula of economics that failed in Pakistan was related to higher interest rates of 13.25% aimed at reducing inflation.

“Devaluation does not increase exports and higher interest rate does not reduce increased prices and both these formulas failed in Pakistan,” he told the publication.

He criticised the incumbent regime and said that the government team comprises mafias and cited examples that they had resisted against increasing the prices of medicines as PML-N PM had refused and asked for exploring other options instead of allowing an increase in prices of drugs and medicines. However, the PTI allowed a hike in medicine prices, he added.

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Flawed policies

Dastagir said that the government granted permission for export of sugar but the PML-N-led government allowed limited export quantities such as 250,000 tons. This PTI govt allowed export of 1.1 million tons. It gave a signal that sugar would become short in the domestic market, he added.

“It was directly cabinet policymaking failure resulting in the price increase from Rs50 to Rs110 per kg in the domestic market,” he maintained.

Then wheat was smuggled out because of flawed economic policymaking, he said and added that these mafias earned hundreds of billions of rupees.

How to boost exports?

He said that there were other factors required for boosting up exports, including the supply of energy at reduced rates such as electricity and gas, simplification of the taxation system and improved perception about Pakistan in the foreign world.

He said when Pakistan’s energy supply normalised and terrorism was controlled, it gave a message to the world that Pakistan was able to provide reliable export orders, so it helped to achieve double-digit growth in exports.

“Despite a massive devaluation of 40% in the first year rule of the PTI-led regime, the exports could not get a quantum leap, rather it decreased,” he said.

PTI’s failures

When asked why the PTI failed to fix the economy, he replied that the political economy remained a major cause of their failure as they tied themselves with the narrative that they would not undertake those steps that were taken by PML-N-led regime.

It resulted into halting of development activities through the Public Sector Development Program (PSDP) as they did not lay down a single brick of development in the last two and a half year rule. So the productive public investment got choked, he maintained.