Government of Pakistan is considering to impose Economic Emergency has restricting many public and business activities only to save foreign currency from going out, curtail the import bill of petroleum and avoid electricity outages. Finance Minister Ishaq Dar said only a few days ago that there is no apprehension of default but now 22 point proposal of Economic Emergency has been suggested by himself to fulfill the conditions of IMF. The finance division has issued a strong rebuttal but the state of affairs proves that something is being discussed at higher levels.
According to media reports economic emergency proposal under consideration in Islamabad includes:
1. Restrict all economic activity from 8am to 6pm. Meaning all markets, businesses to close at 6pm including restaurants etc
2. Personal vehicle usage to be restricted to 3 days only or Car must have 3 occupants. (Issue on implementation traffic police in all provinces has been asked to device a plan)
3. Reduce foreign flights to Gulf states by half and each traveling passenger must justify trip. (MOFA and MOI instructed to prepare method) also revert old system of no more then 2 international flights on foreign carriers a year for more then 2 trips citizen must travel PIA or other Pakistani carriers. If NTN not provided at time of booking a flat fee of Pkr 5000/- domestic travel and Pkr 65,000/- for international flights to be imposed and collected at airport before boarding.
4. Stop all self financed Hajj and Umrah and ziarats. Citizen must receive NOC from Ministry of religious affairs, Finance and travel history must be used to determine.
5. Any dollar remittance for education overseas only from taxes money. If your tax returns do not justify citizens ability to fund a child’s education overseas that transaction must not be allowed.
6. Minimum one year closure of money exchanges nationwide. Only banks to be allowed to change currency after due diligence being prepared by SBP.
7. Essential imports priority. All LCs to be categorized as per importance and need. Unless exporter justifies import with confirmed orders for export no new machinery or plant import LC to be opened.
8. All inward settlements to be credited in PKR all foreign currency accounts in local banks to be put on temporary hold and withdrawals only in PKR on SBP set rate.
9. Govt official foreign trips to be halted unless host country is paying. Only state visit for bilateral importance to be undertaken with minimum support staff and no private citizens or family members to travel and PM and other dignitaries to use only commercial flights for travel Unless destination has no commercial airline connectivity.
Experts say that a total of 22 point preliminary summary including above 9 points has been proposed to Ministry of Finance with a lot of resistance at every level. Situation is dire and all out efforts are being made to keep appearances and maintain positive sentiment but officials are saying that IMF has become increasingly difficult and demanding unrealistic steps.
“The current govt is fighting all such adverse proposals with full force but finding it increasingly impossible to further delay such harsh and impractical steps. Meanwhile Pakistani elite are quietly setting up businesses and relocating their wealth overseas.” Business community shares.
“Let us not forget only 2 years ago Sri Lankan economy was tipped as the best performing economy in this part of the world and today is left in ruins. Important and very painful days ahead.” The observes express their view.
The rebuttal from Finance Ministry followed the reports about the economic emergency. Observers are of the view that the rebuttal has been issued only to avoid the reaction from the business community and the public.
The ministry of finance has admitted the challenges are gigantic and the crisis exists in shape of exogenous factors like commodity super cycle, Russia-Ukraine War, recession at world level and floods in Pakistan but it is in appropriate to equate Pakistan with Sri Lanka.
Tazeen Akhtar
