As Pakistan continues to grapple with the economic crisis, Defence Minister Khawaja Asif admitted that the country has already defaulted and held ‘everyone’ including the establishment, bureaucracy, and politicians responsible for it. Addressing an event in Sialkot on Saturday (February 18), Asif said that standing on one’s own feet was essential for Pakistan to become a stable country.
“You may have learnt that Pakistan is going bankrupt or that a default or meltdown is taking place. It has already taken place. We are living in a bankrupt country,” Asif said, The Dawn reported on Sunday. “The solution to our problems lies within the country. The IMF does not have the solution to Pakistan’s problems,” the defence minister added.
Asif also said the present situation was the outcome of the least regard for the Constitution and the rule of law during the last seven decades, the report said.
His remarks come as Pakistan sees decades-high inflation and critically low foreign exchange reserves depleted by continued debt repayment obligations. According to reports, the country’s foreign exchange reserves are slightly over $3 billion which is hardly enough for 10-15 days of imports.
Earlier this week, a senior economist with Moody’s Analytics told the news agency Reuters that inflation in Pakistan could average 33% in the first half of this year, adding a bailout for the International Monetary Fund (IMF) was unlikely to put the economy back on track.
“Our view is that an IMF bailout alone isn’t going to be enough to get the economy back on track. What the economy really needs is persistent and sound economic management,” senior economist Katrina Ell said on Wednesday.
“There’s still an inevitably tough journey ahead. We’re expecting fiscal and monetary austerity to continue well into 2024,” Ell told Reuters. The Moody’s economist added even though the Pakistani economy is in deep recession, inflation is incredibly high as (the result of) part of the latest bailout conditions.
Pakistan, which is in dire need of funds, could not reach a deal with the IMF last week. An IMF delegation departed Islamabad after 10 days of talks but said negotiations would continue.
In a statement last week, the IMF said, “Considerable progress was made during the mission on policy measures to address domestic and external imbalances. Virtual discussions will continue in the coming days to finalise the implementation details of these policies.”
(With inputs from agencies)
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