Kya PDM Hukoomat Mein IMF Pakistan Ko Default Karta Dekhna Chahta Tha ?Miftah Ismail

ARY NEWS

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00:00Before I come to you, I want to hear a statement from Mr. Ishaq Dar, who is accusing the IMF of a huge crime in the context of the PDM era.

00:09If you remember, last year I was in power for 16 months.

00:14Last year, I was in power for 11 and a half years.

00:17So, they were reviewing us. Why weren't they reviewing us?

00:20Believe me, my assessment is they wanted Pakistan to default.

00:24Mr. Ismail, do you believe that the IMF wanted Pakistan to default in the last PDM government?

00:33No, the IMF never wanted Pakistan to default.

00:39This was discussed at the time when Mr. Dar was the Minister of Treasury.

00:45And when this was not happening, that they were talking about nuclear assets and other things.

00:53The IMF understands Pakistan really well.

00:55God forbid, if anyone talks about nuclear assets, they don't talk to the Finance Minister.

01:00And neither did they ever talk to him.

01:02And when Prime Minister Shahbaz Sharif went to Pakistan in June,

01:09he completed the negotiations with the IMF in one or two days.

01:15Here, the interest rate increased by 1% and the deal was done.

01:18So, really, no. I don't think the IMF wants Pakistan to, God forbid, go bankrupt.

01:24I don't think anybody really wants Pakistan to go bankrupt.

01:28Our friends don't want it, our enemies don't want it either.

01:31And we shouldn't even imagine, God forbid, that Pakistan will default.

01:35Mr. Mufti, this statement is coming from Mr. Dar at such a point

01:39where our proper finalization of the next program of IMF has not been possible.

01:44Will this become a threat for us?

01:47Because even before this, because of Mr. Dar's statements, there has been some confusion in the past as well.

01:52No, no, no. This will not become a threat.

01:54The IMF and all this, look, their staff is sitting there, they monitor all the newspapers.

02:00Their mission chief keeps looking at the Pakistani newspapers first.

02:05They also understand Pakistani politics and they know this.

02:09If Mr. Dar had been the finance minister and then he would have been talking about this,

02:14then it would have been difficult. But now, because he is not the finance minister,

02:17I don't think it will be difficult for him.

02:20The reason for the delay by the IMF is completely different.

02:23It has nothing to do with this statement.

02:25My simple question is, is this the reason for not being the finance minister of Mr. Ishaq Dar?

02:31That such a statement should not be made and then there should be no confusion.

02:34Look, you will have to ask the Prime Minister.

02:39You have been a part of his cabinet, I know you know the inside out, Mr. Mufti.

02:44No, no, but I think I cannot really speak to why he decided not to make Mr. Dar the finance minister.

02:51Only the Prime Minister can answer this.

02:54And look, a lot of people give political statements against the IMF.

03:02I don't think that requires a real program of the IMF.

03:06But if you are following the program or not, if you have stopped the dollar,

03:11if you are not letting the dollar trade in the state bank,

03:14if you are doing other things, it makes a difference.

03:17And I think the last time it made a difference with those things.

03:20After that, we saw that in February, March, April, May, there was a lot of inflation in Pakistan, 35%.

03:26And then the Prime Minister went to the program in June.

03:32I don't know the reason, but I don't think statements like this make a difference.

03:39Hopefully not.

03:40Hopefully not, yes.

03:41But one more issue that we have seen, Mr. Mufti is giving a positive outlook.

03:46Just guide us through whether this is a positive outlook or not.

03:49Inflation has come down.

03:50The chances of lowering the interest rate are getting very strong.

03:54And inflation has come to the lowest of the last 36-38 months.

04:01In single digit as well.

04:03Is this a glimpse of long-term relief?

04:07Or is this a short-term issue?

04:10No, no, I think this is a real difference.

04:13Look, in December 2021, the price of oil was $71.

04:20The price of Brent oil was $71 in December 2021.

04:25After that, oil prices have gone up.

04:28When the PDM government came, there was a war between Ukraine and Russia at that time.

04:35Oil prices went up to $105, $108.

04:38When oil is expensive, when international oil is expensive in Pakistan,

04:42petrol and diesel prices are expensive in Pakistan.

04:45The downstream prices are higher.

04:48Now that it is getting cheaper, it is cheaper.

04:50And you have seen that 9% or 9.5% interest rate has increased.

04:55Inflation rate has increased.

04:56And it is obvious that the government has increased electricity prices a lot.

05:01Gas prices have increased a lot.

05:03That unaffordability is still there.

05:05And when we are saying that inflation has decreased,

05:07we are not saying that prices have decreased.

05:09We are saying that the speed of prices increasing has decreased.

05:12But anyway, the increase from 35% to 9% has become very easy.

05:17Now the need is that the state bank should reduce interest rates immediately.

05:21At the moment, the interest rates in Pakistan are 10% in the real term,

05:25excluding inflation.

05:27So, they are the highest in the world in Pakistan.

05:30So, it is necessary to reduce it.

05:31If interest rates decrease,

05:32unemployment will increase very fast.

05:34Poverty has increased very fast.

05:36Today, more than 10 crores of people are living under poverty in Pakistan.

05:4040% of Pakistan's population is living under poverty.

05:43Electricity prices are low.

05:44So, if interest rates decrease a little,

05:46the factories that are closed will start opening.

05:49Or investment will start happening in Pakistan.

05:51Mr. Iftad, there is another flip side to this.

05:54When inflation increases, interest rates are increased to reduce it.

05:58Now that inflation has decreased,

05:59if the government wants to reduce it further,

06:02to increase its political leverage,

06:04to benefit from the decrease of inflation to the grassroots level,

06:08at least there should be a feeling among the people

06:10that inflation has really decreased,

06:12and cheapness has started happening,

06:13or at least the sign of inflation has started decreasing.

06:15So, it will be difficult to reduce the interest rates further.

06:19It will be a matter of danger.

06:20Do you think that if you think politically,

06:23the government will want the interest rates to decrease?

06:28Look, I think the government thinks politically.

06:31I don't think it thinks about Pakistan's long-term economic interest.

06:36But the truth is that right now,

06:40the real interest rate in Pakistan is 10%,

06:45which is the highest in the world.

06:47And if you reduce it by 3-4%,

06:49then the government's debt servicing becomes very low.

06:53I think there will be about 60-70 lakh rupees left on every percent.

06:57So, if the government reduces the interest rates by 3-4%,

07:02then the government's loss will be reduced,

07:04which will actually reduce inflation further.

07:06Because if the government's loss is reduced,

07:08then they will have to borrow less money.

07:10And right now, along with inflation,

07:13look, there were two big global economies in Pakistan.

07:15One was that inflation was very high,

07:16and unemployment was also increasing.

07:18Now that inflation has decreased a little,

07:20because oil has decreased in the global market around the world,

07:22then you should take advantage of it.

07:24And if you reduce the interest rates here,

07:26then there will be a reduction in the unemployment that is spreading.

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