Pakistan has averted the risk of default at least “for four months” after reaching an agreement with the International Monetary Fund. But, the question remains at what cost the country would pay back that debt which according to many was a “lifeline” for the country amid the economic crisis.

To answer this question and many others, Shaukat Piracha had Special Assistant to the Prime Minister Qaiser Ahmed Sheikh, economist Farrukh Saleem, and PTI leader Aliya Hamza Malik on Aaj News Exclusive on Thursday.

“This is not good news,” the new inductee in the 85-member federal cabinet said.

Sheikh, who is serving the cabinet on a “pro-bono” basis, said it was yet to ascertain what would be the impact of the IMF funding.

Pakistan is expected to receive $1.1 billion under the stalled loan programme. It is expected that the inflow would open doors for more from the friendly countries that in the recent past have helped the country’s economy.

“We have to increase the tariff on electricity, gas, and petrol. We have to impose import duties on different items. The exemption is to be abolished, and the rich are to be directly taxed,” Sheikh said, adding that the assets of bureaucrats have to be declared.

The above-mentioned points were apparently part of the IMF demands to secure the funding as the country in the past had detracted from the loan programme when it decreased the oil prices and provided subsidies.

According to Sheikh, such decisions were “very harsh” and would result in further inflation which currently stands at more than 25%.

He blamed the previous government of PTI for the economic woes by saying that one cannot lie on matters pertaining to the economy. But, it was rejected by former ruling party’s Aliya when she got the turn to speak.

She quoted statistics, which according to her damaged the economy.

SAPM Sheikh reiterated that the agreement was not something good, adding that the country was going to take more loans to improve the economy. “We are paying 55% of our total income in interest on loans and it will increase now,” he said and lamented that investors have lost confidence in Pakistan as they have diverted to India and Bangladesh.

He was of the view that the price of petrol would shoot after the increase in the petroleum development levy.

The following are the stages of funding approval:

1. Sharing of MEFP
2. Staff Level Agreement (SLA)
3. SLA goes to IMF Executive Board
4. Board gives approval
5. Pakistan gets $1.1 billion disbursement

Economist Farrukh Saleem said that a green signal from the IMF would open the door for inflows from friendly countries, which according to him would provide $3 to $4 billion to Pakistan.

He went on to add that the expected development had a positive impact on the economy, stock market, and the rupee’s value.

“Pakistan has to make a payment of around $8 billion by June. It will fill our economic gap and I think our calculations are complete by the end of June,” he said.