ISLAMABAD - Finance Minister Senator Ishaq Dar reiterated complete political and financial support of the civilian government to the armed forces in case the peace talks failed and a military action against militants became inevitable.
“We have certainly given peace a chance. All stakeholders, including the military, are very much on board as far as dialogue with the terrorists is concerned. However, if these talks fail, we have other options in store, with military operation being on the top of agenda and the entire nation will be behind the armed forces if this option is exercised,” Finance Minister Dar said, addressing a press conference in Islamabad.
“I cannot give the exact expenditures to be made in a military operation against terrorism, which will be worked out once we decide to go for it,” he said and added not only the federal government would fully fund the operation; it would spend every penny to get rid of extremism. Pakistan had suffered around $80 billion losses against the ongoing war on terrorism, he added.
Expressing his satisfaction over the current economic situation, Dar said, “The government has brought down the rates of dollar, onion and tomato to the level of June 5, 2013, when PML-N took charge.” He said dollar value had come down to Rs 98, reaching a 9-month low level. He asserted the government would pass on the effects of dollar depreciation to the masses by reducing prices of petroleum products and other imported commodities. Similarly, he said public debt had decreased by around Rs 800 billion due to rupee appreciation.
"We did not use State Bank money to strengthen the rupee, but persuaded exporters to bring back their money to Pakistan and checked currency speculation, which resulted in the rising value of the rupee," he added.
The finance minister officially admitted the formation of Pakistan Development Fund (PDF) for the completion of mega development projects of the country like motorways and energy sector. The PDF would require $20 billion to $25 billion in next four years. Without disclosing the name, Ishaq Dar said, “A friendly country has contributed $1.5 billion to PDF in the last few days that helped in building the foreign exchange reserves. I do not want to disclose the name of that country; perhaps, it has asked us not to do so,” said the finance minister, answering a question.
Ishaq Dar said the country’s foreign exchange reserves had increased to $9.3 billion while commercial banks’ reserves stood at $4.75 billion and the central bank reserves were $4.77 billion. He added that net inflow received by Pakistan in February 2014 was two billion dollars, which enhanced the reserves.
Dar reiterated his stance to increase the country’s reserves to $10 billion by end of March. He hoped the IMF Executive Board meeting would approve third tranche (around $550 million) for Pakistan on March 24. Similarly, he was of the view that the US would reimburse $400 million to Pakistan under Coalition Support Fund by the first week of April 2014. He claimed the government’s problem of balance of payments had been resolved to some extent.
Showing satisfaction over the rupee appreciation against US dollar, the finance minister said confidence in Pak rupee had increased. “I do not ask anybody to resign from the membership of the Parliament over the improvement in rupee value,” Dar replied to a question whether Sheikh Rashid should resign as he had announced to do so if dollar’s value reached Rs 98.
He further said the government did not inject a single dollar into market to stop rupee deprecation as the Indian government did to inject $50 billion to improve its currency value. The government took several steps to improve the rupee value, including banning gold import, persuading exporters to bring back their money to Pakistan and checking currency speculation, which resulted in the rising value of rupee, he added.
The finance minister claimed the government had turned around the economic situation in the last eight months (July to February), as all economic indicators had performed well. “Independent organisations like International Monetary Fund (IMF) have acknowledged Pakistan’s stance of increase in GDP growth and decline in inflation rate,” said Ishaq Dar.
Talking about the performance of the macroeconomic indicators, the finance minister said the budget deficit had been restricted to 3.1 percent of the GDP during the eight months (July-February) of the current financial year from 4.1 percent of a year ago. The tax collection has recorded growth of 17.7 percent as it stood at Rs 1,348 billion during July-February of FY 2014 against Rs 1,145 billion of the previous year.
Similarly, he said, remittances had increased to $10.24 billion during July-February of FY 2014 as against $9.23 billion of a year ago. “Exports also registered growth of 6.2 percent as the country exported goods worth $16.86 billion during July-February of FY 2014 against $15.88 billion of the previous year. Similarly, 2,490 new firms have been registered with Security Exchange Commission of Pakistan during the last eight months as compared to 2,166 registered in the corresponding period last year‚ which shows growth of 11 percent,” Dar averred.
Senator Ishaq Dar said the inflation rate had come down mainly due to the unchanged petroleum products’ prices in the last few months. Moreover, the large-scale-manufacturing sector of the economy had recorded growth of 13.2 percent in December 2013, the highest level in seven years.The finance minister was confident that the government would succeed in achieving the target of in4.5 percent GDP growth rate during the ongoing financial year.
He said the famous Japanese financial institution, Jetro, had declared Pakistani business growth at number two in the world while another international financial institution had predicted that Pakistan would become 18th biggest economy of the world by 2050 if the pace of economic activities remained sustainable. He expressed the confidence that the government would achieve this target by 2025 by ensuring good governance and transparency.
To a question, the finance minister said the government was working to appoint heads of power sector entities, adding the process had been halted due to the Supreme Court decisions.