Former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi on Thursday said that his speech, in which he concluded that Pakistan was bankrupt, was being "misreported" and only a three-minute portion of it was "cherry-picked".

A day earlier, during a wide-ranging speech on Pakistan's economic condition at Hamdard University, he said the country was not in a state of "going concern" — an accounting terminology referring to a business that is operating and making a profit.

"We keep saying that everything is good, the country is running well, we have achieved great success and we brought tabdeeli (change) but this is wrong. In my view, the country is, at the moment, bankrupt and not a going concern.

"It is better if you decide first that we have reached bankruptcy and we have to move forward compared to saying everything is running well and I will do this and that. These are all things to deceive the people," Zaidi said.

A video clip of his speech was shared widely on social media.

Reacting today, Zaidi said his speech was being "misreported", adding that he had given a presentation of 30 minutes, of which only three were "cherry-picked".

In a tweet, he said: "Yes I said that with this constant current account & fiscal deficit there are issues of bankruptcy & going concern but look at the solution."

He said his statement had been made on a "basis & conviction".

"I only want to say that whole speech is to [be] read and listened [to]."

In another tweet later on Thursday, the ex-FBR official said that Pakistan's total foreign debt stood at over $115 billion while its current account deficit was between $5 to $8bn.

"When we will be able to pay that debt? It is better to recognise the reality then living in illusion. We need to have a reality check," he added.

Systemic deficiencies

Addressing a seminar in Hamdard University with the theme "Evolving Pakistan Economy, Challenges and Opportunities for Youth", Zaidi outlined on Wednesday what he saw as the current systemic deficiencies in the country's economic setup and how they could be resolved.

He said changes were required in the National Finance Commission Award (NFC) such as the incorporation of the Provincial Finance Commission Award. "The problem in Pakistan is that money doesn't go beyond the NFC and corruption occurs there," he said.

The second issue he pointed out was the lack of documentation in the economy. Another one was a revamp of the exchange regime, he said.

"You will have to remodel your local debt and [...] think whether assets of the federal government such as land can be used for repaying that debt. If we continue repaying this debt then our economy won't have the space to [launch] any public welfare programme."

He also called for changes in the formulation of the discount rate, saying that "four people sitting in State Bank governor's boardroom" could not be allowed to decide what the discount rate would be.

"Then, you will have to do another important thing," he said, elaborating that production of exports needed to be started in coastal areas instead of sending raw materials and energy inland first for production and then sending the products to coastal areas for export.

"If you will have an exportable surplus, it will always come from southern Pakistan," he said.

'Fixation with remittances'

Fixation with remittances needed to be abolished, he said. "Yes, remittances [are] a good thing but they are export of manpower. We don't need to export manpower but services," Zaidi added.

The former FBR chairman said Pakistan should aim to export education, medical, engineering and accounting services. "You have to create the environment through which services are exported," he stressed.

Apart from the economy, he also said changes were required in the political and foreign policy realm. Zaidi said Pakistan needed to immediately ensure "extremely good" relations with the United States and the West.

If Pakistan's exports were to increase then it would be due to the West, he said, adding, "if you want to increase exports then you will have to be friends with Washington."

Zaidi also called for transparency in the China-Pakistan Economic Corridor (CPEC) project, saying that he himself had not yet fully understood what it was. He lamented about confusion over which projects were part of CPEC.

He also said regional trade needed to be promoted. Zaidi said if raw materials for medicines could be bought from India, then "why do you have an issue with other things? This means your decision [to not trade] is wrongly based."

The former FBR chairman also called for reforms in the education system such as widespread teaching of English and limiting the teaching of theology to higher grades.