Islamabad, 2 January 2023 (GNP): Pakistani politician and political economist Miftah Ismail shared his views regarding Pakistan’s future and economy in a recent interview.
Upon being asked about Pakistan’s position to default in 2023, how it will affect the citizens and how long the default can last, he first explained what a default is: “Default is a very negative situation for a country. It occurs when a country finds itself unable to pay back the debt it owes. That is what is meant by default.”
He continued saying, “the common people will be affected first since such a situation brings a negligible supply of imported commodities. For Pakistan and many other nations, these commodities include things like petrol, cooking oil and many food items, among others.”
He further stated that if Pakistan does default, it will take six months at the minimum to recover. However, he believes such a scenario won’t come to pass.
According to Miftah Ismail, if Pakistan defaults in 2023, then the government will have to go back to the International Monetary Fund and other lenders to request that the country will pay any amount due to them in 2023 and 2024. Furthermore, any other future payments Pakistan owes would have to be rescheduled to 2023 and 2024.
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In the interview he gave, Miftah Ismail was asked about the arrangements for the food items which are in shortage in the economy due to the flood disaster of 2022, to which he replied: “Food items are being imported and there is not going to be a shortage of wheat or rice in the country. Yes, the rice crop was somewhat destroyed by the rains and floods in Sindh. But the rice fields of southern Punjab remained safe. Pakistan rice production remains good enough and the country will also manage to export this crop.”
Further, he answered a question regarding Pakistan’s textile sector, which accounts for the largest number of exports from the country. He was asked that much of the cotton crop was destroyed in last year’s floods as well and so the question of the textile sector’s ability to compete in the global market arose if it continued to rely on imported raw material, to which he responded saying: “: I do not think this is a big problem. While we are definitely forced to import raw materials, our textile industry is capable of generating four to five times the value of the products manufactured using it. Thus there is no imbalance.”
The former finance minister also advised the federal government and other stakeholders to increase Pakistan’s exports by adopting a proper strategy for export promotion and rejecting import substitution. Ensuring a proper supply of electricity and gas to the industry at the competitive rates that the governments of neighbouring countries like India and Bangladesh are offering, along with keeping Pakistan’s currency at its realistic value will yield results in the export sector in the upcoming years.