ISLAMABAd  - Finance Minister Senator Ishaq Dar said on Saturday that Pakistan’s foreign exchange reserves would reach $16 billion by December this year as IFC (International Finance Corporation) and other international commercial banks and organisations are approaching the government.

Chairing the first meeting of Economic Advisory Council (EAC), the finance minister informed that IMF team is expected to arrive in Pakistan by end of current month of January to review the economic situation.

Talking about the current economic situation, Senator Ishaq Dar said that remittances have shown an increase of 9pc which reached $7.78 billion while exports have increased to $12.64 billion, showing an increase of 5pc this year. The commercial banks had increased credit to the private sector to Rs250 billion against Rs.73 billion which reflected increase in economic activity. Similarly, the revenue collection has also shown a growth of 17% in the last 5 months as compared to same period last year, he added.

Turning to the exchange rate situation, the finance minister said speculators were responsible for depreciation of rupee against dollar and said that comments on exchange rate issue should be made in responsible manner. All members of EAC endorsed the view point of finance minister on the issue and assured him of their full support as it was a sensitive issue.

In his opening remarks, the finance minister expressed the hoped that the re-activation of EAC will prove to be useful as this forum would provide an opportunity to interact and exchange ideas with prominent persons associated with the economy of Pakistan. The Ministry of Finance, he added, wanted to benefit from their wisdom and was open to any suggestions which could add value. If we all put our head together we can tern around Pakistan’s economy, he added. The Ministry, of Finance, he offered, was ready to provide them access and arrange meetings so that they can play a productive role.

The Council after thorough deliberations decided that it shall identify certain critical sectors and areas where its inputs could help the government in formulating policies. In this connection, the EAC identified power sector, exploration of natural resources, agriculture, social sector, resource mobilization, public sector disinvestment and foreign remittances as areas where its expertise could be utilized.

The finance minister said that tapping of natural resources and mobilization of resources and of the natural resources is the way forward and that government is pro-actively working on both these counts.

The finance minister, referring to a briefing made by him earlier to the cabinet and media on January 1, said that the PML (N) government is committed to transparency and has therefore constituted an autonomous body called the Pakistan Bureau of Statistics (PBS) so that authenticity of economic figures can be ensured. The government, he said, will do all that is possible to further strengthen PBS and would welcome suggestions to achieve robust economic data. Similarly, the decision to release quarterly accounts as well as rebasing of accounts every ten years has been taken with the purpose to bring transparency in the monetary and fiscal side.

Dilating on the legacy inherited by present government, he said that the projected deficit last fiscal year was reduced from 8.8% to 8.2% with prudent fiscal management by the PML (N) government which was further brought down to 8% by provincial surpluses. Another challenge for the new government was the clearance of circular debt which was cleared as it was legally, commercially and ethically binding on the government since it was a contractual obligation.

The finance minister said that the economic situation inherited by the PML(N) government left little option but to approach the IMF as external inflows had dried down  due to failure on the part of the previous government to abide by Stand-By Arrangement (SBA) agreed with the IMF. The IMF diligence helped the present government in re-engaging with international institutions. There is no harm to borrow and create assets but certainly bad if it is used for current expenditures, he added. The finance minister said that the government is undertaking reforms which are sometimes painful. It is also working on a policy to tap hydro carbon resources as there are reports of proven reserves.

Dr. Ashfaq H. Khan appreciated the government decision for publishing a tax directory. He further suggested strengthening of PBS through its capacity building.

Dr Furrukh Saleem appreciated the endeavors of the government to manage budget deficit which he termed as the root cause of our economic malaise. Supporting the government’s policy of disinvestment of Public Sector Entities (PSE), he suggested a communication strategy for public awareness in order to dispel any misperception. Farrukh Qayyum said that the way the auction of spectrum license is carried out would set the pace for planned disinvestment by the government. Dr Abid Qayyum Suleryi appreciated the decision of the finance minister to allot NTN numbers to parliamentarians and offered to make a presentation on shale gas deposits in the country. Arshad Zubari suggested that the government should appoint a professional to manage debt and encourage construction industry to create new job opportunities. Razzaq Dawood emphsised on the need to work out a comprehensive policy to boost exports which according to him was the solution to our economic problems. Farooq Rehmatullah offered to make a presentation on Pakistan’s Hydro Carbon potential in the next meeting of EAC.

It was decided that the next meeting of the EAC would be held in the 2nd weak of February. The meeting was attended by Razzaq Dawood, Dr Ashfaq H Khan, Abid Hussain, Shahid Hafeez Kardar, Arshad Zubari, Farooq Rehmatullah, Saqib Sherani, Dr Furrakh Saleem, Miftah Ismail Chairman, Board of Investment, Yaseen Anwar, Governor State Bank of Pakistan, Qazi Azmat Easa, CEO Poverty Alleviation Fund, Dr Abid Qayum Suleri, SDP, Secretary Finance Dr Waqar Masood, Advisor Finance Rana Asad Amin and senior officials of the Ministry of Finance.