Neither Pakistan was near to bankruptcy in the past nor there is any likelihood for this to happen in the future, Dr Shahid Hasan Siddique, Senior Economist and Chairman Research Institute of Islamic Banking and Finance told Mettis Global.
The macroeconomic indicators are performing well as the country is still receiving foreign direct investment which reflects the intact trust of other countries in Pakistan’s investment climate and opportunities, he added. According to the data compiled by SBP, Foreign Direct Investment (FDI) increased by 12 percent YoY to $798mn during 5MFY22, i.e., July to November, as compared to FDI of $710mn reported in the corresponding period last year.
Adding to it, he stated that foreign exchange inflows through Roshan Digital Account (RDA) reached $2.92 billion in November 2021 since its launch in September 2020, indicating the increasing confidence of non-residents Pakistanis (NRPs).
Meanwhile, the country also receives notable remittances by overseas Pakistanis. During the month of November 2021, remittances clocked in at $2.4 billion, up by 0.6 percent, compared to the same month of last year.
The country cannot be bankrupt as the international financial institutes Pakistan i.e, International Monetary Fund (IMF), and World Bank (WB) are continuously extending their support in terms of finance, he said.
To note, Pakistan and International Monetary Fund (IMF) authorities have reached a staff-level agreement on policies and reforms needed to complete the sixth review under the Extended Fund Facility (EFF). Completion of the review would make available SDR 750 million or about $1.059 billion, bringing total disbursements under the EFF to about $3,027 million and helping unlock significant funding from bilateral and multilateral partners.
Recently, a $3 billion Saudi deposit has been received by the State Bank of Pakistan (SBP) under Saudi Fund Development (SFD) that would support Pakistan’s foreign currency reserves and contribute towards resolving the adverse effects of the COVID-19 pandemic.
Pakistan has also been raising capital from international capital markets i.e, Sukuk bonds.
Not to forget, China Pakistan Economic Corridor (CPEC) is also a good example of the trust and support of China towards Pakistan as the geographical importance of Pakistan cannot be overlooked in any case.
Considering the above facts, the statement by Syed Shabbar Zaidi, the former chairman of the Federal Board of Revenue (FBR) “Pakistan is a bankrupt entity” is entirely wrong, he underlined.
However, one should not forget that Pakistan had to face difficulties in the repayment of debt but the government always managed to sail through a tough situation, he noted.
He also pointed out that the country is facing hurdles in debt repayment and for this government takes more loans to repay the previous liabilities.
“Authorities need to discontinue this practice,” he emphasized.
The situation clearly represents that Pakistan has enough financing resources but effective utilization is missing, he stated.
To recall, Zaidi in his recent speech at Hamdard University said, “My conclusion is that Pakistan as an entity is bankrupt. As we say in accountancy, it’s not going concern in today’s position. We say that everything is good, we brought change but this is wrong, in my view, the country at this moment is bankrupt.”
Later, he dismissed the media reports saying his speech was being misreported.