Did Imran Khan leave Pakistan on the verge of bankruptcy?

Pakistan Prime Minister Shehbaz Sharif on Friday hinted that the country was on the verge of bankruptcy when he said his government's move to increase fuel prices was necessary to avoid the country from facing bankruptcy.

Pakistan on Thursday increased the prices of petroleum products by Rs 30 per litre. Following the hike, price of petrol is now at Rs 179.85, diesel at Rs 174.15, kerosene at Rs 155.95 and light diesel at Rs 148.41.

In his first address to the nation after assuming power last month, Shehbaz talked mostly about the domestic problem faced by the government.

The prime minister said the move to increase fuel prices was necessary to avoid Pakistan from facing bankruptcy.

Shehbaz said the decision to increase petroleum prices was tough. “We with a heavy heart increased prices of petroleum; we have to take the decision in a difficult economic situation. It is due to the incredible price hike in petroleum prices in the global market,” he said.

“The previous government had announced a subsidy which could not be supported by the treasury. We took the decision by preferring the country on our own interest,” he said.

To mitigate the impact of the hike in the petroleum prices, he announced a Rs 28 billion per month relief package to provide Rs 2,000 per month to about 14 million families.

“These families comprise almost 80 million individuals which is one third of the total population of the country,” he said.

His main focus was the relief package for the vulnerable groups after the government increased the petroleum prices to get an assistance package from the International Monetary Fund (IMF).

Shhebaz also blamed the previous government for the current hike in petroleum as it has committed with the IMF for this increase.

“You made a deal with the IMF, not we; you accepted their tough conditions, not we; you burden the people with inflation, not we; you pushed the country into an economic puddle, not we…,” he said.

He also announced launching consultations with all political parties for agreeing on a Charter of Economy, so that no government in future could change the economic direction of the country.

Justifying the vote of no-confidence against former premier Imran Khan, Shehbaz said the previous government had destroyed the country. “We changed a corrupt government on the demand of the people,” he said.

Shehbaz came to power last month when he formed a coalition government after Khan was removed through a no-confidence vote.

The new government faced tremendous economic and political challenges but it has started making tough decisions, starting the hike in petroleum prices, to tackle these problems.

In his address, Shehbaz briefly touched the issue of ties with India.

“For durable peace in South Asia, it is the duty of India to reverse the Aug 5, 2019 actions in Kashmir, so that we can make solid progress to solve all problems, including Jammu and Kashmir, through peaceful means,” he said.

Tensions between India and Pakistan have spiked since New Delhi abrogated Article 370 of the Constitution to revoke the special status of Jammu and Kashmir on August 5, 2019. India’s decision evoked strong reactions from Pakistan, which downgraded diplomatic ties and expelled the Indian envoy.

India has categorically told the international community that the scrapping of Article 370 was its internal matter. India has repeatedly told Pakistan that Jammu and Kashmir "was, is and shall forever" remain an integral part of the country. It also advised Pakistan to accept the reality and stop all anti-India propaganda.

India has also told Pakistan that it desires normal neighbourly relations with Islamabad in an environment free of terror, hostility and violence.