Adding to the skepticism is his hefty monthly salary of US$100,000, amounting to a staggering US$1.2 million annually. Despite decades under the IMF microscope, Pakistan struggles to generate sufficient dollars to finance its imports, with around US$150 billion from overseas Pakistanis disappearing into a financial abyss over the last five years.
The finance minister's primary task now is to persuade the lender of last resort to release more dollars, settling outstanding loans and facilitating imports, particularly for the elite. The proposed solutions involve increasing electricity and gas tariffs, raising interest rates, and imposing additional duties and taxes, collectively squeezing every Pakistani financially.
Financial wizards argue that these measures will bridge the budget deficit, but they overlook the resultant surge in government borrowing and the negative impact on local manufacturers' competitiveness. This situation brings to mind the saying, "An expert is a person who makes things complicated." Pakistanis are inundated with advice on improving taxes, but there's a glaring absence of plans to tax those enjoying exemptions since independence, and austerity measures are conspicuously lacking.
As Pakistan rushes into talks with the IMF, concerns persist about addressing GDP growth, boosting exports, and curbing extravagance. The impending debt servicing crisis looms large, and while the IMF may greenlight a larger and extended standby program, the real question lies in whether policymakers have viable strategies to maintain debt servicing at a sustainable level.
Absence of how Mr Aurangzeb shall handle the dismal Agriculture revenue generation by the federating units in his list of additional revenue generation areas Retail/ wholesale/ etc indicates no seriousness.
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