Miftah barred from giving lectures on Pakistan economy

News Analysis

ISLAMABAD: Former finance minister and known economic wizard Miftah Ismail was stopped from giving lectures on Pakistan economy at the prestigious Chatam House in the United Kingdom as well as Oxford and University College, London by putting him on ECL a day before he was supposed to proceed to London for the lectures.

In five months, Miftah Ismail probably brought more benefit to Pakistan’s economy than most ministers dealing with finance in much longer period.

Dr Miftah Ismail announced economic reforms preventing non-tax filers from buying new cars or properties to induce people to come in the tax net. At the same time, he reduced individual tax rates to incentive salaried people and new taxpayers.

Miftah Ismail also announced Pakistan’s most successful amnesty, bringing in over Rs120 billion to FBR and over $200 to the State Bank. Along with the amnesty, he announced a new rule whereby DC rates and FBR rates would end and people will be free to register properties at any price they want -- but gave the federal government the right to buy the property at 100 percent more than the registered price. This 100 percent was to be reduced to 50 percent over the next two years. This would’ve meant that real estate prices would become regularised.

The real estate is where most undocumented or illegal wealth is parked and fixing this problem was the most progressive and creative step ever undertaken by a finance minister. This government however is still confused and has not enforced this law.

Miftah also announced a budget which was liberal and business-friendly and was praised by all sections of society. A prominent former columnist called him the smartest finance minister in a generation.

In his brief tenure he also dealt with FATF, though a month after he had gone and Pakistan was pushed in the grey list. And finally he also managed circular debt by paying Rs200 billion of power generation companies and their suppliers.

Before becoming finance minister he was Chairman Board of Investment and also a non-executive Chairman of SSGC. While he was the Chairman of SSGC it awarded an LNG terminal contract to Engro.

Miftah was called by NAB and he appeared before it and later answered the questionnaire. At no point did he say he won’t cooperate. Yet he was put on ECL a day before he was supposed to travel to London to give lectures on Pakistan’s economy at the prestigious Chatam House as well as Oxford and University College, London.

All 13 directors of SSGC voted for the terminal including Additional secretaries who are now serving as Secretaries to the government. There were lawyers, bankers, businessmen on the board. They all voted for the terminal. Miftah as one of the non-executive directors also had one vote. Yet he was the only one to be placed on ECL. Nor was anyone from SSGC management including the MD was put on the ECL. Not anyone from the petroleum ministry. Just Miftah Ismail and Shahid Khaqan Abbasi. The Engro terminal was originally contracted to supply 200 mmcfd of gas in the first year and to re-gasify and supply 400 mmcfd from second year onwards when SSGC finished the first phase of its pipeline addition. The price given from second year was $0.66 per mmcfd.

When SSGC installed a new pipeline to connect to the north of the country, the price dropped to $0.48 per mmcfd. Compare this price to India at 1.00 for similar capacity and $0.58 for twice the capacity. Or compare to Indonesia which is $1.10 for similar capacity. And even Bangladesh where the rate is only for FSRU and not for the infrastructure, the price is $0.48 for larger capacity than Pakistan. So Pakistan really was able to get a good deal on its terminal. Is anything the nation should be thanking SSGC’s management and board for its contribution and not putting a political opponent on ECL and try to silent him?

All this suggest that he was placed on the ECL because of his effective criticism of PTI and its economic management. Miftah Ismail is the PML-N point man on finance and the economy. He writes for The News and Jang every week and is very effective in his criticism. Very few politicians can write as well as him. But then again very few politicians have a PhD in Public Finance and Political Economy from the Wharton School, University of Pennsylvania.

Miftah’s ability to remember and rattle off numbers is amazing. It is simply condemnable that rather than learning from him and engaging in debate the government is trying to silence one of its most effective critics, who talks of Pakistan alone.