Prime Minister Imran Khan Tuesday said that his government would approach the International Monetary Fund (IMF) for a second relief package as the third Covid-19 wave has gripped the country with its services sector hit badly.
“We are going to speak to IMF because we see disruptions ahead.” He said while addressing the launching ceremony of the United Nations Development Program’s Pakistan National Human Development Report on Inequality, adding that Pakistan did considerably well during the first two waves, and the economy was recovering. He said the government will have.
He said the government will have to rethink the Ehsaas Programme, as “..the services industry has been badly hit everywhere in the world but in Pakistan, our industry has been really badly hit.”
The report, presented by the lead author Dr. Hafiz Pasha, explores many dimensions of inequality in Pakistan. These dimensions have been captured both at the national and provincial levels, exploring inequality between and within Pakistan’s provinces.
In addition, inequality has been measured from the perspective of people focusing on children, labor, youth, and women.
The Prime Minister compared the $4 trillion package given to the US, a nation of 330 million, to Pakistan which distributed just $8 billion among a population of 220 million. “So I think, this is time for the second package and we will obviously talk to IMF,” PM Khan said.
Referring to IMF Managing Director Kristalina Georgieva’s statement, the Prime Minister observed that the IMF head realized the graveness of the situation as harsh IMF conditions could not be imposed on the people already suffering owing to the pandemic.
He said civilized societies are defined by the ways how they treated their poor as well as their planning to address inequality. He said the elite capture had not been a problem of only Pakistan but all developing countries even the richer countries too.
Imran Khan said the Covid-19 has made poor people poorer as more people have gone below the poverty line. However, he said the elite capture is mainly a problem of the developing countries.
Calling the Financial Accountability, Transparency and Integrity Panel report as ‘shocking’, the prime minister said every year, one trillion-dollar leave developing countries for tax havens and seven trillion dollars are laundered out of poor countries to richer developed countries. He said this single fact was the reason behind inequality in the world.
About the elite capture in Pakistan, the prime minister said his government is the first one to go after cartels including sugar cartels which had jacked up the commodity’s prices affecting mainly the poor class. He said the cartels usually had their political connections and his government would strengthen the Competition Commission of Pakistan to address the cartelization.
He said the money laundering from developing countries does not only lead to poverty but also leads to devaluation of local currency owing to huge dollar outflow besides causing inflation in the country.
Imran Khan said he is proud of the recognition by the UNDP report, the reduction in poverty ratio, and human development growth in Khyber Pakhtunkhwa province despite the fact the province had been badly hit by terror and consequent displacement of population.
It is worth mentioning here that according to new World Bank statistics, Pakistan’s recovery is going to remain slow, with the GDP growth rate for the ongoing fiscal year is expected to remain at 1.5, which is up from the organization’s January estimate for the economy.
Similarly, the new IMF report casts a shadow on the country’s economy, with same GDP growth rate as World Bank, but increased unemployment and inflation.
However, a day earlier than the report, Finance Minister Hammad Azhar said, that Pakistan’s economy “will grow faster than forecast this year.” The government’s inflation rate remains 6.5% while IMF projects it to be at 8.7%. Similarly, the government’s GDP growth rate projection is 2% compared to 1.5% by both International Organizations.
Pakistan’s population increase is a very troubling issue mentioned in the World Bank report that no one is talking about, especially at a time when the government is running out of resources and a growing population can be a burden on a nation with increasing poverty.