ISLAMABAD: While calling the current financial crunch worse than that during wars and Covid-19 pandemic, former state minister for finance Hammad Azhar on Sunday alleged the International Monetary Fund (IMF) had to come forward to ‘expose the lie’ of Prime Minister Shehbaz Sharif regarding a telephonic conversation with the IMF Managing Director Kristalina Georgieva.

Even if the IMF agreed to any arrangement, it would put very strict conditions on Pakistan due to the current state of the economy, warned the PTI leader while addressing a press conference in Islamabad.

He criticised the economic policies of the Pakistan Democratic Movement (PDM) government and said if the ‘regime change operation’ was not conducted, the country’s economic situation would have been different.

He believed the IMF never negotiated programmes with interim governments and never felt comfortable while negotiating with outgoing governments either.

polls before June to allow new govt to negotiate with Fund

The former minister said the PM Office just a day ago issued a statement that the IMF managing director had called PM Shehbaz Sharif.

However, he added, the IMF denied it on Sunday, clarifying that the government of Pakistan had been continuously requesting to call and a discussion was held regarding the International Conference on Climate Resilient Pakistan, scheduled for Jan 9 (today).

Energy crisis

“All the industries have been suffering due to current economic situation. Around 30 to 40 per cent industry has been closed. The country has energy crisis because foreign exchange is not available to procure coal,” he said.

The PTI leader said Finance Minister Ishaq Dar had been claiming he would bring down the exchange rate of US dollar to less than Rs200, but it was now Rs226, with a huge gap of Rs50 between the official and open market rates.

“The difference between government rate and open market rate of US dollar has reached Rs50. It was around Rs4 during the PTI tenure.”

He said after forming the government [in 2018], the PTI had to contact the world to borrow loans due to the Pakistan Muslim League-Nawaz policies as the PML-N had left nothing in the exchequer.

“Later, we did not require to borrow loans and every year our foreign reserves were increasing. But now once again foreign reserves have been dropping and will reach US$4.4billion in a few days as the country has to return US$1billion to a UAE bank,” he said.

Because of the current situation of economy, he warned, the IMF would put very strict conditions which would cause a further price hike. He said the economy was in free fall after the change of government.

Polls before deal Since the IMF did not negotiate programmes with an interim government and never felt comfortable doing it with an outgoing government, the PTI leader suggested that elections be held before June so that a government having fresh mandate could deal with the IMF.

Mr Azhar said people were standing in queues to get subsidised wheat flour. Only a few days back a person lost his life while trying to get a flour bag, he said, warning that coming days would be very difficult.

Referring to Dar’s press conference, the ex-minister said he did not give a way out for Pakistan. “The government is directionless and it will not be able to address major issues,” he added.

Published in Dawn, January 9th, 2023

Correction: An earlier version of this story quoted Hammad Azhar as saying that the IMF’s clarification pertained to its delegation’s reported upcoming visit to Pakistan. The error is regretted.