“1% of elites control this country,” said Ismail who has held the portfolio for six months. He stated that while American billionaires Bill Gates and Steve Jobs “comes from nothing but made a fortune with his own talents”, almost all the rich in Pakistan are beneficiaries of the “wealth of the generation”.
“As the economy heats up, it is the low- and middle-income groups that face the burden as companies lay off staff,” the former minister noted.
“(The last government) distributed Rs. 580 billion of the richest 1% of Pakistanis according to the Interim Economic Refinancing Facility. The government gave loans to import machinery, however, the elite also ordered consumer goods for themselves and their families from abroad, thus increasing the cost of imports. The government is borrowing at 15% but the rich only receive money at 1%”, he said, adding that the liquidity injection increased imports of machinery and widened the current account deficit as business groups domestic production of goods for domestic consumption only.
Without naming anyone, Ismail said a consortium asked him to help set up a 500,000-ton polypropylene factory when he was finance minister. They claim 20 percent tax protection for 20 years because “the company can’t compete with its Chinese counterparts,” Ismail said.
He also criticized the auto sector for its inward-looking approach that has drained foreign exchange on imports for decades without generating any dollar income through exports, Dawn reported.
Ismail, who has been replaced by Ishaq Dar, is the fifth finance minister to take up the chair in less than four years as Pakistan’s economy sees persistent turmoil while running a current account deficit. The country’s economy has grown significantly and rising inflation has put pressure on both families and businesses.
Ismail said the government led by Prime Minister Shehbaz Sharif has suffered because of economic policies implemented by the former Pakistan Tehreek-e-Insaf (PTI) regime led by the ousted Prime Minister Imran Khan.
Pakistan reached a staff-level agreement with the International Monetary Fund (IMF) at the end of July after months of deep belt tightening unpopular with the government, which took power in April and effectively scrapped the deal. fuel and electricity subsidies, and introduced new measures to expand the base tax.
The new government has slashed a range of subsidies to meet the needs of global financial institutions but risks sparking the fury of a voter struggling under the weight of double-digit inflation. number. Pakistan had hoped for a quick recovery of the bailout, but the IMF has so far not issued the necessary bailout.
Adding to the crisis, devastating floods have engulfed large swaths of Pakistan this month. The disaster killed more than 1,500 people and caused an estimated $30 billion in damage, sparking fears that Pakistan would default on its debt.