The rift between the coalition government’s economic team has widened and the recent spat between former finance minister Miftah Ismail and his successor Ishaq Dar proves that nothing is OK as being portrayed.
From the beginning, Ismail and Dar could not get along and both had serious differences of opinions on the IMF deal and the phasing out of fuel subsidies. Dar was never in favour of withdrawing the subsidies till June 2022, or until the IMF programme was revived.
Miftah took the baton at a time when there were high chances of default and foreign banks were not confirming Pakistan’s Letter to Credit to import crude oil and petrol. He was also facing a hostile IMF, which was furious over the constant breach of commitments given by respective finance ministers.
Pakistan has committed to increasing the petroleum levy on petrol by Rs30 per liter till September 1, and on diesel by Rs15 per on September 1, 2022 and take it to Rs50 per liter in January 2023 on petrol and Rs50 per liter on by April 2023 diesel.
Miftah prematurely increased it to Rs37.5 per liter despite the fact that IMF had set the Rs35 per liter limit for petrol for October 1. Dar has cut it to Rs32.5 per liter on petrol, which is not very low compared to the October 1 requirement.
Recently, the former finance minister Miftah Ismail, who worked hard to revive the stalled IMF programme publicly opposed the government’s decision to slash the prices of petroleum products.
Taking to Twitter, Miftah wrote: “Not increasing PDL this month without IMF approval is reckless, but what PTI did with our economy was unforgivable,” in response to PTI leader Shaukat Tarin’s tweet.
Meanwhile, Dar in response advised Miftah “not to worry”.
“I have to handle the International Monetary Fund (IMF) matters, so from now on, neither Miftah nor anybody else has to worry about anything.”
It is the second time in the past one-and-a-half years that due to a change of the finance minister, the country’s economic policies will undergo drastic changes.
The suspension or derailment of the IMF programme because of any reason will not augur well for Pakistan’s external sector viability. The country does not have the luxury to irritate the IMF anymore amid prolonged deep mistrust between both the sides.
