Miftah Ismail blasts PTI’s economic performance

Former Finance Minister Miftah Ismail explains why the government's hype on export numbers is nothing to crow over given the massive depreciation the country has seen the past 2.5 years.

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PPP had exports of $24.8 billion in its last year. Next year, PML-N in its first year,  beat that figure and achieved $25.1 billion. The following year (2016) it got over just over $24 billion. The year after that was tough for trade as commodity and oil prices declined, and both our imports and exports declined. Pakistan’s exports hovered around $22 billion for those two years only to bounce back to $24.8 billion in PML-N’s last year.

After a considerable devaluation, and pontificating about exports for years, PTI only managed to decrease exports in its first year by $500 million to $24.3 billion in 2018-19. Its export performance was again down in 2019-20 to $22.5 billion, but of course, Covid reduced Pakistan’s exports in the last four months.

Read more: ‘Pakistanis are becoming poorer under PTI’: An interview with former finance minister Miftah Ismail

In the first half of this year, exports stand at $11.8 billion, about 5 percent below last year’s level. It now seems clear from the overall pattern that exports this year will be plus/minus 3 percent of what was achieved by the PML-N in 2017-18. After a 40 percent devaluation, this doesn’t seem like a very satisfactory performance.

Given the direct cash is given to people in America and monetary easing in Europe, and the difficulties in going to restaurants, bars, and other recreation places, spending in the West on home textiles is increasing rapidly. But is Pakistan poised to take advantage?

Read more: Stabilisation will lead to growth: PTI’s failed economic promises so far?

As State Bank has devalued the currency from Rs 168 to a dollar to Rs 160 to a dollar in the last three months, the federal government has made gas and electricity more expensive. The price of domestic gas for the export industry has increased from Rs 750 to Rs 920, and for the local industry, it is now Rs 1070. Base power tariff has just been raised by Rs 1.95 per unit, and of course, we have already got a fuel adjustment charge this quarter and are expecting another rise next quarter.

On top of that, the government has announced that it will stop supplying gas to the domestic industry from February 1 and the export sector from March 1. (Two and six weeks notice only). How will the industry cope remains to be seen, but these energy policies will likely result in another disappointing export figure.

Read more: PM Khan: Passing oil prices impact unavoidable to avert further debt burden

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