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Monday May 03 2021
Web Desk

'IMF committed grave injustice against Pakistan': Finance Minister Shaukat Tarin

Web Desk

  • Newly-appointed Finance Minister Shaukat Tarin says the demand to increase the electricity tariff by IMF is unjustified.
  • Finance minister says increase in tariff is leading to a rise in inflation in Pakistan. 
  • Tarin says if current govt is not able to take GDP growth to 5%, then the country will be at God’s mercy for next “four years”.

Newly-appointed Finance Minister Shaukat Tarin on Monday said that the International Monetary Fund (IMF) committed grave “injustice” against Pakistan in terms of the Extended Fund Facility offered to the country.

Tarin remarks came during a meeting of the National Assembly’s Standing Committee on Finance, Revenue, and Economic Affairs. The meeting was chaired by the committee chairman, Faiz Ullah Kamoka.

“IMF did injustice to Pakistan, the demand to increase the electricity tariff is unjustified,” said the minister, adding that due to the move, the economy has stopped moving forward, while corruption is on the rise.

Read more: Waqar Masood’s role expanded, redesignated as SAPM on Finance, Revenues

The minister told the lawmakers that if the current government is not able to take the GDP growth to 5%, then the country will be at "God’s mercy for the next four years”. He assured the lawmakers that he is trying to explain the situation to the IMF.

“The increase in tariff is leading to a rise in inflation. We have told the IMF that we will reduce the circular debt but increasing the tariff is unexplainable,” said the minister. 

He also told the lawmakers that even though the revenue has risen in the last two months, the government still has to make tough decisions to revive the economy.

“Instead of introducing taxes, there is a need to increase the tax net. Our country lacks short-term, medium-term and long-term policies,” deplored Tarin. He cited the example of China, Turkey, and India where there are consistent economic policies in place.

The minister said he is of the view that there is a need to improve policies in agriculture, industries, the housing sector, and price control.

Read more: IMF approves $500 million disbursement to Pakistan

Tarin told the lawmakers that mortgage in the country is at 0.25%, adding that if the housing sector is revived, then 20 other industries will start working.

"The government should privatise all institutions that it is unable to run," Tarin said, adding that there very little amount is spent on education and health.

The minister, while speaking to the media after making an appearance before the committee, said that at this point, the government should see what relief can be obtained from the IMF as inflation is rising and urgent measures are needed to control it.

What did Shaukat Tarin say about Pakistan's economy before becoming finance minister?

The minister's criticism of the government policies is not something new, as before taking charge of the ministry, he had slammed the policies pursued by his predecessors. 

Shaukat Tarin was sworn in as the county's new finance minister on April 17, after he replaced federal minister Hammad Azhar, who had just been on the job for less than a month.

But, what was Tarin's perception of the country's economic policy before he was appointed?

While speaking in Geo News' programme "Aaj Shahzeb Khanzada Kay Saath", he had presented a charge sheet against the government's economic policy.

Read more: Govt not to increase petrol price in May, says Finance Ministry

"We don't know where the economy is heading [...] We will have to put our house in order," the newly-appointed finance minister had said back then.

The captain of the ship has to stand firm and be strong or the vessel won't move ahead, he said.

"We have to change the NAB (National Accountability Bureau) rules to bring in people from the private sector," Tarin had added.

Speaking on another TV show, he had said achieving Pakistan's current economic goals was a difficult task, but not an impossible one.

"The Pakistani nation is not afraid of difficulties," he had said.

Read more: PM Imran Khan reconstitutes Economic Advisory Council, finance minister to chair in his absence

Tarin had said if the Federal Board of Revenue (FBR) does not increase its revenue to 15%, then the country will run out of money to spend.

"The FBR will have to bring revenue to 20% in 5-7 years [...] otherwise the country will not be able to achieve an economic growth rate of 7-8%," he added.