Kaiser Bengali quits govt committees, warns economy is 'on path to destruction'

• Govt taking steps against recommendations of crucial bodies: Bengali.
• Says panels suggested shutting down 17 divisions and 50 departments.
• "People compelled to commit suicide" amid sky-high inflation.

ISLAMABAD: Renowned economist Dr Kaiser Bengali on Saturday stepped down from three government committees formed to cut expenditures and carry out institutional rightsizing, warning that the economy “is on a ventilator due to [mounting] debts and on the path to destruction”.

Bengali was a member of key bodies for austerity, rightsizing and expenditure reduction committees formed by the Pakistan Muslim League-Nawaz (PML-N) led coalition government to deal with the economic crisis after it returned to power after the 2024 general elections.

He sent his resignation to Finance Minister Senator Muhammad Aurangzeb and Cabinet Division Secretary Kamran Ali Afzal.

His resignation came at a time when the incumbent government is claiming to make all-out efforts to come out of the economic crisis via austerity measures, rightsizing and privatisation of unnecessary and loss-making state-owned entities, as well as seeking another bailout package from the International Monetary Fund (IMF).

In his statement, Bengali praised the incumbent government for initiating "good efforts" to reduce its spending and termed the three committees crucial for cutting down the government's expenditure.

Detailing his services, the economist said that all three committees tabled recommendations to the federal government for reducing the government's expenses.

He added that the panels suggested shutting down 17 divisions and 50 departments after precisely reviewing the functioning and effectiveness of 70 government institutions and 17 corporations.

“This government is taking steps against the recommendations [of the committees],” Bengali slammed the decisions of Prime Minister Shehbaz Sharif’s administration.

“Junior employees — from Grade 1 to 16 — are being terminated instead of high-ranking officers from Grade 17 to 22 to reduce the expenses,” he alleged.

“Jobs of Grade 17 to 22 officers in different departments are being protected [by the federal government]. If we remove these high-ranking officers, we could have cut our financial expenses by Rs30 billion annually,” he claimed.

His statement cast doubt on the recent government moves to rightsize federal ministries and institutions, including restructuring of the state-owned utility stores, closure of Public Works Department (PWD), and privatisation oe Pakistan International Airlines (PIA).

It is also worth mentioning here that the federal cabinet was also informed earlier this week regarding the merger of 82 government bodies related to different ministries and their dissolution into 40 institutions in light of the rightsizing committee’s recommendations.

Bengali, who has a master’s degree in economics from Boston University, USA, and a PhD degree in economics from the University of Karachi, warned that the economy is “on the path to destruction” due to the piling up of debts.

The people are compelled to commit suicide as it’s become difficult for the masses to manage household budgets, the economist added.

Throwing shade at the PML-N government’s economic policies, he claimed that global institutions, including the International Monetary Fund (IMF), have refused to disburse loans to Pakistan.

His statement came after it emerged that the financially struggling Pakistan was not on the agenda in the upcoming meeting of the IMF Executive Board scheduled up to September 4, as per sources quoted by Geo News.

The release of the IMF's latest schedule is a significant development, but the absence of Pakistan's loan approval on the agenda is a cause of concern as it is critical for the country to secure the loan to shore up its sinking economy.

On the other hand, the government remained optimistic that the country will secure approval for a $7 billion bailout package from the IMF next month, sources privy to the matters told Geo News earlier this week.

Finance Minister Aurangzeb last week also dismissed concerns about the IMF declining the staff-level agreement, exuding confidence that "the lender will approve it next month".

Pakistan and the global lender had reached an agreement on the 37-month loan programme in July.

The IMF said the programme was subject to approval from its Executive Board and obtaining "timely confirmation of necessary financing assurances from Pakistan's development and bilateral partners".

Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF programme, Finance Minister Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.

Rollovers or disbursements on loans from Pakistan's long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.