ISLAMABAD: Speaking to media at the Ministry of Finance, Advisor to the Prime Minister on Finance, Revenue and Economic Affair Division Miftah Ismail has said that the concerns shown by the International Monetary Fund (IMF) over the economy are correct, but the government has done a lot to keep the economy on track.
He said that IMF in its report predicted that Pakistan’s Gross Domestic Product (GDP) ratio would remain at 5.5 per cent, however, the government is optimistic that we will reach the 6 per cent target. The IMF has its own mechanism to present the figures, now Pakistan is not in any program so we do not give importance to these things.
He further said that an action plan will be prepared by June to tackle the recommendations of the Financial Action Task Force (FTAF) on money laundering and terrorism financing, adding that the government is contemplating methods to properly tackle this issue.
He repeated his stance that every government should focus on two matters, one of which is improving the GDP, and the second is controlling the rate of inflation.
Miftah said that the economy of the country is working and moving in the right direction. He justified that massive imports of power generation equipment have led to the current account and trade deficits. The government has to work on current account deficit and budget deficit as both are on a steady rise.
He said a state-run entity like Pakistan Steel Mills (PSM) is incurring huge losses. The employees of PSM were ten times more than the required manpower. He said that over Rs380 million was being paid to PSM employees, without any profitable output to justify the amount.
During former President Musharraf’s era, a bid was offered for sale of PSM but the government did not accept it. He recalled that the federal government offered the Sindh government to buy PSM for one rupee but the provincial government rejected the offer.
He said privatisation of public sector entities like PSM and PIA will help improve the economy and uplift life standards of the masses. To a question, he said it was possible that debt payments of the country may increase in the coming years and called the need to maintain the right ratio. A subsidy of Rs11.5 billion will be given to the power sector in the impending budget.
The advisor said a sum of Rs80 billion would be paid to Power Holding Private Limited (PHPL) and Rs45 billion to the power sector. He said the Finance Ministry would give Rs30 billion subsidies to power division. “We want to make action plan before June”, he added.
The finance adviser also proposed to talk to China about a Free Trade Agreement (FTA), saying the country’s strategy should be to protect the local industry. He said businessmen had some reservations as they were not included in talks.
He said that the government will make a decision regarding the amnesty scheme during the next week.