Federal Finance Minister Shaukat Tarin on Wednesday expressed hope that top-level talks between Pakistan and the International Monetary Fund (IMF) will be successful and the $6 billion Extended Fund Facility (EFF) will be put back on track.
He said in an interview at the United States Institute of Peace, “I believe the progress we have made so far is really encouraging and as we say, God willing, I am now in this journey.” I see this happening.”
The minister said the sixth round of talks with the IMF was the most important part of his visit to the US, adding that several virtual meetings have already taken place, while technical level discussions have also taken place. concluded.
He said that in the final phase a meeting would be held with senior IMF officials, including the fund’s managing director.
The minister said his government believed that the IMF’s demand for a hike in electricity rates would drive inflation, adding that this was discussed in technical discussions with the fund, which also pointed out That the increase in tariff will be done in a gradual manner so that it does not have a sudden impact on inflation.
Tarin said there were some problems in the power sector, including excess capacity, for which the government had to pay, as well as improving the performance of distribution and generating companies. He said that all this is being successfully negotiated with the IMF.
economy and growth rate
The minister said there was no stagnation in growth and the Pakistani economy would grow by more than five per cent during the financial year 2021-22.
He said that in the 1960s, Pakistan’s economy was the fourth largest in Asia. However, Zulfikar Ali Bhutto’s nationalization policy and the Afghan war in 1979 hampered economic growth, he said.
Tarin said Prime Minister Imran Khan handled an economy that was struggling in 2018 with a $20 billion current account deficit, an unstable fiscal deficit, adding that the prime minister had to face some political unpopularities, including currency devaluation. Apart from taking the decision had to go for a tough IMF program. Increase in discount rates and utility prices.
The minister said that as the country’s economy began to strengthen and develop, the COVID-19 pandemic affected the world.
However, it was dealt with skillfully by the government, as indicated by the less human and economic damage caused by the pandemic in Pakistan than in the rest of the world. He said the government continued to invest in two productive sectors, agriculture and industry as well as housing, during Covid-19.
He said during FY21, a growth of over 4 per cent was registered as compared to -0.5 per cent in the previous year, indicating a V-shaped recovery.
The minister said that almost 60 per cent of the population of Pakistan is below 30 years of age. He said they needed jobs, so the government revived agriculture, industry, exports and housing.
However, there was a need to ensure that the development “does not overheat”, he said.
Tarin said the government is also making sure that the underprivileged are not ignored and asked to wait for the impact of positive economic growth, which has not reached them for several decades. Therefore, the government used a bottom-up approach to ensure sustainable and inclusive growth.
For this purpose the government was providing interest free loans to farmers and low income families besides issuing health cards and imparting technical training to help about 40 lakh families.
focus on geoeconomics
The Minister said that the Prime Minister has shifted the focus of the country from Geo-politics to Geo-economics to ensure the economic welfare of the people. “Such a shift in focus means that everything changes in terms of foreign policy, economic policy, internal security, and whatever and relations with neighbors.”
He said that Pakistan has good relations with all the neighboring countries but there are some issues with India which need to be resolved.
trade with india
Tarin said there is a fundamental issue between Pakistan and India and that is Kashmir, which he has described as a disputed area according to UN Security Council resolutions.
However, he said that the present Indian government is not accepting its controversial nature and has taken some unilateral decisionsDepriving Kashmiris of various rights.
He said that trade and economic activities are being affected between India and Pakistan, he said that PM Imran had told India several times that if they take one step, Pakistan will take two steps and asked the Indian government to give a positive response. requested.
The minister said that at the political level, there is a need to provide some space for economics and welfare of the people of both the countries.
The Finance Minister said that like all other countries, Pakistan also wants and is striving for an inclusive government in Afghanistan.
However, he cautioned that the Taliban were running out of cash And if the world does not come to support them on humanitarian grounds, then there will be complete anarchy, which will spread to Pakistan and other countries.
He said that since the Taliban were saying that they will cooperate with the world, become a responsible country, take care of human rights, protect women’s rights and take a pledge not to promote terrorism, so we have to help them step by step. and encourage them to perform. improve their behavior.”
Tarin said that if the situation in Afghanistan worsens, it will have the biggest impact on Pakistan. “Pakistan believes that if the situation in Afghanistan worsens, we will be directly affected,” the minister said.
Talking about the security situation in Pakistan, the minister said that Pakistan had barricaded its border with Afghanistan except a small strip near Chaman, while traffic to and from Afghanistan was controlled. And the security forces were also taking necessary action to maintain the security.
Tarin said that Pakistan wants to build friendly relations with every country including the US and China.
He said Pakistan had a “major strategic partnership” with the US and that its friendship with China would not affect its ties with the East.
“We believe we can work with both powers equally.”
The Finance Minister said that China has helped the country in building infrastructure but it does not mean that Pakistan has become China-centric.
“We are open and want to do business with China, America, Europe, Japan, Korea. it is us [an] open country. There should be no misunderstanding,” he said.
On the China Pakistan Economic Corridor, Tarin said that Pakistan needs to build infrastructure to attract foreign investment.
The finance minister said that since Pakistan was not in a position to build such a large infrastructure, China provided funds and helped build roads, railways, power generation and other utilities, thereby generating economic activity.
Responding to a question, he said there are some projects in which companies from China, the US and Pakistan are engaged in joint ventures and cooperating with each other.
“This cooperation can be increased,” he said.
Tarin stressed that the Gwadar port was not China-centric and was open for use by all, including Japanese, South Koreans and Europeans.
“Gwadar is the right place if one wants to do business with African countries or Central Asian states,” Tarin said, adding that Gwadar was a “huge opportunity” because it was a unique region that could be found in the Gulf, Central Asian republics and even That the distance of China from the port was short.
The Finance Minister said that the government wants to attract investment from different countries and that is why it has developed infrastructure. He said that any country can come and invest in Pakistan.
Elaborating on his point, he said that Pakistan is making efforts to attract people from different countries to invest in economic sectors and that too. Contacting Foreign Pakistanis for investment purposes.
However, he said that there is a need for peace and stability in Afghanistan. Tarin said a stable Afghanistan is good for all and urged the world to help make the country manageable for the benefit of all.
FATF Gray List
On the remaining conditions of the Financial Action Task Force, the Finance Minister said that Pakistan had fulfilled 26 of the 27 conditions and the 27th was also half fulfilled.
He said that in this situation any other country would have been removed from the gray list but “Pakistan is being punished by some countries for different reasons – not for economic reasons.”
“To be honest [the] There is only one mantra that Pakistan is a terrorist country. [and that] Pakistan encourages terrorism.
Tarin said that people are being screened for the flight to the capital from the country.
They said that no one will be spared And whoever has done something wrong will have to face the consequences.
Human Resource Improvement
The Finance Minister said that the government is working to reform the entire human resource sector through measures such as bringing in the private sector in key positions in the ministries and combining bureaucrats with the understanding of both the government and the private sector.
He said the Federal Board of Revenue had formed a committee consisting of 50-50 representation from the public and private sectors to move forward efficiently.
ease of doing business
He said Pakistan has jumped 28 places in terms of ease of doing business due to comprehensive policy decisions.
Tarin said Prime Minister Imran Khan himself is taking charge and the Investment Board is reporting directly to him and the prime minister is holding two meetings every month.
The Minister also said that Special Economic Zones will be made autonomous to provide a conducive environment for foreign investors. He said that the autonomy status would initially be introduced in about six regions within the next 12 months and later it would be repeated in other regions as well.
‘The government has no work to run the business’
Tarin said that about 85 companies are being run by the government, of which 15 are incurring losses of around 1 per cent of GDP. These included airlines, railways, steel mills and power distribution companies.
He said these companies would be delinked from the ministries, handed over the control to professionals and privatized within five years.
The Finance Minister said that in developing countries like Pakistan, the government has “no jobs” to run business.
future path of pakistan
The Finance Minister said that no obstacle will stop the government from making Pakistan great again economically and one of the top countries in Asia and globally.
“If we make Pakistan one of the top countries in Asia economically” [then] It will be an achievement – that’s my motivation,” he said.