ISLAMABAD - Federal Finance and Economic Affairs Minister Senator Ishaq Dar has said the PML-N government has taken a bold initiative to settle the circular debt, besides taking steps to ensure that it does not recur in future. 

“This one step should help raise the confidence of investors and investment in this critical sector,” he said while addressing Pakistan-US Business Opportunity Conference at Dubai on Tuesday.

Dar welcomed this initiative and said it was for this reason that the Pakistan government had extended its fullest support for its success. “I must also say the presence of ministerial delegation from Pakistan, at a time when we were all busy in the parliamentary business of the budget approval is a clear signal of our commitment and support for the conference,” he observed.

Finance Minister Ishaq Dar, welcoming the business leaders to the conference, said, “I see top business groups from Pakistan and I am sure equally formidable groups are participating from the US side.”

“Our economy is facing a number of challenges. First, it is the significant imbalances in our macroeconomic framework that pose major threats to economic stability. It is well known that the twin deficits of fiscal and balance of payments are not in the best of shapes. Not only that sufficient reserves are not available commensurate with our trade volume, domestic credit is largely preempted by government borrowings, leaving little room for the private sector to invest,” he remarked.

“Secondly, Pakistan’s identity as an economy with a stable policy framework is missing. “Undoubtedly, over the last three decades the country has moved in the direction of creating an increasingly larger space for the private sector and establishing a regulatory framework for private investment in important sectors like banking and finance, telecommunications, power, oil and gas and electronic media with a view to protecting and safeguarding interests of all stakeholders,” he asserted.

Ishaq Dar noted the problems established the fact that a predictable business regime was the fundamental requirement of spurring investment and consequent economic growth in any country. He added that it was for this reason that the PML-N government had come into office with a clear economic vision that would guide their economic policies throughout the tenure. “In view of its significance, he had the opportunity to unfold this vision in my budget speech,” he said.

“This vision assigns larger share of economic development to private sector, restricts government to regulatory sector, limits government expenditures within the larger bounds of revenues collected, making all citizens share the burden of revenue mobilization, ending the culture of exemptions and concessions in taxes, providing public sector services on the principle of cost recovery, giving subsidies only to targeted populations and finally creating a very strong social protection system for the poorest segments of the population.”

“As soon as we translate this vision into reality our identity will be firmly established in the eyes of the world. We will then have a predictable investment regime,” he claimed.

The minister on the occasion also acknowledged the strong economic partnership Pakistan had with the United States. “In the months and years ahead, I am confident this partnership will only grow stronger. We will welcome US investors and are prepared to facilitate their investments in Pakistan,” he reiterated.

He noted the key areas that this conference was focusing on – energy, agriculture and textiles. He said: “We are also working to bring new power based on gas and coal and both of these we will initially import. All of you know these projects will result in significant business opportunities in Pakistan and I urge you to be the first to line up for them.”

Federal Water and Power Minister Khawaja Asif, speaking on this occasion, said the government was committed to promoting trade, commerce and investment for achieving national prosperity.

He said the United States had emerged as the largest trading partner besides a source of significant investments in Pakistan and its cooperation in the fields of energy, agriculture and education would grow stronger and deeper in the days to come.

“I am quite confident that this conference would facilitate business deals directly between the US and Pakistani companies and increase global awareness of Pakistani business opportunities.

He said the conference would highlight the innovations underway in Pakistan’s economy and support high-growth areas like information technology, electricity generation, agribusiness, education, textiles, logistics, and cold chain storage.

More than 150 delegates, including top businessmen from the US, Pakistan, UAE and multinational companies, are attending the conference.

Of these, 60 are top Pakistani businessmen, 38 representatives from the US companies, 12 from UAE, 36 from multinational companies and US officials, including US Ambassador to Pakistan Richard Olson

Meanwhile, addressing a press conference in Dubai, Ishaq Dar said the PML-N government would promote small and medium enterprises (SMEs) to spur economic growth and development in industrial sector and create employment opportunities. He revealed the government had prepared medium-term goals under structural reforms 2013-16 under which economic growth would be accelerated to 7 per cent to be averaged at 3 per cent during the past five years.

He said inflation would be brought down to single digit while investment to GDP ratio would be enhanced to 20 per cent during the period. “We are going to rationalise electricity and gas tariffs so that the common people should not be burdened,” he remarked.