WASHINGTON: Finance Minister Shaukat Tarin has expressed hope for a successful outcome of top-level negotiations between Pakistan and the International Monetary Fund (IMF) for revival of the Extended Fund Facility (EFF).
“I believe that the progress we have made to date is really encouraging and I see this happening now in this visit,” the federal minister said in an interview at United States Institute of Peace on ‘Pakistan’s Economic Future.
The minister said that the concluding 6th round of talks with the IMF is the most important part of his visit to the United States, adding that many virtual meetings already took place while the technical level discussions have also been concluded. He said, at the end, meetings would be held with seniors at the IMF, including the Managing Director of the Fund.
The minister said his government thinks that the IMF’s demand to increase power tariffs will trigger inflation, adding that this point was made in technical discussion with the fund, which was also informed that the increase in tariff would be made gradually to avert any abrupt impact on inflation.
He said there are some problems on the power side, including excessive capacity, for which the government has to pay, adding, performance of distribution and generation companies is also being improved. He said all this is being successfully negotiated with the IMF.
The minister said there is no stagnation in growth, the Pakistan economy would grow by over five percent during the fiscal year 2021-22. He said during the fiscal year 2020-21, the growth was recorded at over four percent as compared to negative half percent growth the previous year, showing V-shaped recovery.
He said the country has around 60 percent of the population below the age of 30 years who needed jobs, so the government revitalized agriculture, industry, exports, housing and believed that the economy would grow by over five percent. However, he said at the same time there is a need to make sure it is not overheated.
He said the government is also ensuring that the underprivileged are not ignored and made to wait for the trickle-down effect of positive economic growth, which has never reached them for many decades. So, he said, the government utilises bottom-up approaches to ensure sustainable and inclusive growth.
The minister said Pakistan has met 26 out of 27 Financial Action Task Force (FATF) conditions and the 27th one is also half met. He said any other country meeting such conditions would have been removed from the grey list, however, “Pakistan is being punished by some countries for different reasons, not economic reasons.”
“Frankly it is the same mantra that Pakistan is a terrorist state. Pakistan encourages terrorism,” he said, adding that the country which lost 80,000 people and suffered $150 billion loses and has been suffering for 40 years is being blamed continuously.
He said Pakistan is having good relations with all neighbouring countries, but there are issues with India, which need to be resolved. He said that Kashmir is a fundamental issue between Pakistan and India, which is a disputed territory as per the United Nations Security Council resolutions.
He said the current Indian government is not accepting its disputed nature and has taken few unilateral decisions, depriving Kashmiris of various privileges given to them. He said trade and economic operations between India and Pakistan are suffering, adding that Imran Khan had offered so many times to India that if they took one step Pakistan would take two steps, urging the Indian government to respond positively. He said at the political level, there was a need to provide some space for economics and welfare of people of both the countries.
The minister said like other counties of the globe, Pakistan also wants an inclusive government in Afghanistan and is also striving for that. However, he cautioned that the Taliban government is running out of cash and if the world does not come to support them on humanitarian grounds, there would be complete chaos, which would spill over to Pakistan and other countries.
Talking about the security situation in Pakistan the minister said Pakistan has fenced the border with Afghanistan, except a small strip near Chaman while traffic flow to and from Afghanistan has been controlled and security forces are also taking necessary action to maintain security.
The minister said the government is working to reform the entire human resource. He said the Federal Board of Revenue (FBR) has constituted a committee having half-half representation from public and private sectors to move forward efficiently.
The minister said that owing to the comprehensive policy decisions, Pakistan jumped 28 places in ease of doing business. He said the prime minister is taking charge himself and the Board of Investment is reporting directly to him while the PM is holding two meetings every month.
He said Special Economic Zones (SEZs) would be made autonomous to provide a conducive environment to the foreign investors. The minister said there are around 85 companies run by the government out of which 15 are making losses of around one percent of Gross Domestic Product. He said these companies would be disassociated from ministries and their control would be handed over to professional people to overhaul them and within five years, these would be privatised.
The minister said Pakistan wants to be friends with everybody including the United States and China. He said Pakistan has a major strategic partnership with the US and its friendship with China would not affect its relations with the US. “We believe we can work with both powers equally.” On the China-Pakistan Economic Corridor (CPEC), the minister said Pakistan needed to build infrastructure to attract foreign investments.
The minister made it clear that Gwadar port is not China-Centric, saying that it is open to everybody including Japanese, South Koreans and Europeans. He said if anybody wants to have business with African countries and Central Asia States, Gwadar is the right place. Any country can come and invest and Pakistan has been making efforts to attract people from different countries to invest in economic zones and is also approaching overseas Pakistanis for the purpose.
Meanwhile, Federal Minister for Finance and Revenue Shaukat Tarin has invited the US enterprises to take advantage of ample opportunities offered by the Special Economic Zones (SEZs) and affirmed them full support and facilitation in this regard.
The minister said this while addressing a round table meeting organised by the United States Pakistan Business Council (USPBC) in Washington DC, said a statement issued here on Thursday. Representatives from the US Chamber of Commerce, leading business enterprises, Governor State Bank of Pakistan Dr Raza Baqir, finance secretary and ambassador of Pakistan to the US participated in the meeting.
The finance minister said that the government is firmly committed to providing an enabling environment for the foreign investors and businessmen. He underlined that the government is firmly committed to all-inclusive and sustainable economic growth with a key focus on the “bottom-up” approach as envisaged by the prime minister.
He said the present government inherited a difficult economic situation. As a consequence of prudent policies and fiscal consolidation efforts, the Federal Board of Revenue (FBR) has exceeded the target of revenue collection by approximately Rs180 billion during the first quarter of FY 2021-22. “Similarly, our exports are likely to cross $30 billion by the end of financial year 2021-22. Moreover, the remittances have registered an increase of $2.7 billion during the month of September 2021 and reached $8 billion during the first quarter of FY-2022,” he added.
These figures project continuity in momentum of GDP growth which is likely to be close to 5% during the current financial year. Pakistan is back on a growth trajectory due to visionary pro-growth policies of the Government, he further said.
The finance minister further apprised that the government is taking a number of initiatives to attract foreign investment into the country. For the purpose, full facilitation is being extended and all hurdles are being removed. He quoted the example of MetLife whose long-standing issue has been recently resolved. – TLTP