Finance Minister Tarin links trade with India to Kashmir dispute resolution

Finance Minister Tarin links trade with India to Kashmir dispute resolution.

Federal Minister for Finance and Revenue, Shaukat Tarin stated this in an interview at United States Institute of Peace (USIP).

He spoke on ‘Pakistan’s Economic Future’.

Finance Minister Tarin links trade with India to Kashmir dispute resolution

He expressed hope for successful outcome of top level negotiations between Pakistan and International Monetary Fund (IMF).

Pakistan is seeking $6 billion Extended Fund Facility (EFF) back on track.

He further said that he believes that the progress we have made to date is really encouraging and as we say Inshallah I see this happening now in this visit.

The minister noted the concluding 6th round of talks with IMF as the most important part of his visit to United States (US).

Furthermore, he said that many virtual meetings already took place while the technical level discussions have also been concluded.

He said, at the final, meetings would be held with seniors at the IMF, including Managing Director of the Fund.

The minister said his government thought that IMF’s demand to increase power tariffs would trigger inflation.

Therefore, he raised this point in technical discussion with the fund.

Furthermore, Pakistan also informed of increasing tariff gradually so that it does not have abrupt impact on inflation.

He said that there were some problems on power side, including excessive capacity. For which the government had to pay.

He said that the performance of distribution and generation companies was also being improved.

The minister further said all this was being successfully negotiated with the IMF.

Economy and Growth Rate

The minister said that there was no stagnation in growth, the Pakistan economy would grow by over 5 percent during the fiscal year 2021-22.

He said that back in 1960s Pakistan’s economy was 4th largest in Asia, however the nationalization policy of Zulfiqar Ali Bhuto and Afghani War in 1979 disrupted the economic growth.

He said, Prime Minister Imran Khan took over an economy which was struggling in 2018 with $ 20 billion current account deficit, unsustainable fiscal deficit.

Tarin said that he had to go for tough IMF programme besides taking some politically unpopular decisions including currency devaluation, increasing discount rate and increasing utility prices.

The minister further said as the country’s economy had started consolidating and growing, the Covid-19 pandemic hit the world.

However, it was skillfully dealt by the government as was indicated by far lesser human and property losses caused by the pandemic in Pakistan compared to rest of the world.

He said the government during Covid-19 kept investing in two productive sectors, agriculture and industry as well as housing.

He said during Fiscal Year 2021, the growth was recorded at over 4 percent as compared to negative half percent growth the previous year, showing V-shaped recovery.

Tarin said, the country had around 60 percent population below the age of 30 years who need jobs, so the government revitalized agriculture, industry, exports, housing and believe that economy would grow by over 5, percent.

However, he said, at the same time there was need to make sure it is not overheated.

Bottom-up Approach

He said, the government was also ensuring that underprivileged not ignored and made to wait for trickledown effect of positive economic growth.

Benefits of growth has never reached to them for many decades.

So the government utilized bottom-up approaches 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 giving technical trainings to help around 4 million households.

Change in Focus from Geo-Security to Geo-Economics

The minister said, Prime Minister has changed the focus of the country from geo-security to geo-politics.

It aims to ensure economic welfare of people.

This kind of change in focus means everything changes in terms of foreign policy, economic policy, internal security, and whatever else and relationship with neghbours.

He said that Pakistan was having good relations with all neghbouring countries, but there were issues with India, which needed to be resolved.

Pak-India Trade and Kashmir Dispute

The minister said that there was a fundamental issue between Pakistan and India and that was Kashmir.

Moreover he noted this as a disputed territory as per the United Nations Security Council resolutions.

However, he said, the current Indian government was not accepting its disputed nature.

India had taken some unilateral decisions, depriving Kashmiris of various privileges given to them.

He said that trade and economic operations between India and Pakistan were suffering.

Tarin aid that Imran Khan had offered so many times to India that if they take one step Pakistan would take two steps, urging Indian government to respond positively.

He said at political level, there was a need to provide some space for economics and welfare of people of both the countries.

Afghanistan situation

The minister said that like all other counties of world, Pakistan also wanted inclusive government in Afghanistan and was also striving for that.

However, he cautioned that Taliban were running out of cash and if the world did not come to support them on humanitarian grounds, there would be complete chaos, which would spill over to Pakistan and other countries.

He said that Taliban were saying that they would cooperate with world, become responsible country, take care of human rights, protect women rights. He said Taliban also pledged not to promote terrorism. Therefore, Tarin said we should help them step by step.

The minister said we should encourage them to demonstrate improvements in there behavior.

He said, if situation in Afghanistan worsens it would affect Pakistan the most.

Furthermore, he said Pakistan believes if the situation in Afghanistan deteriorates we will directly get effected.

He also spoke on the security situation in Pakistan.

The Minister said that Pakistan had fenced border with Afghanistan, except a small strip near Chaman.

Besides, traffic flow to and from Afghanistan remains under control.

Security forces were also taking necessary action to maintain security.

Reforms in Human Resource

The minister said that the government was working to reform the entire human resource.

Govt is also working to bring in private sector in key position in ministries. And have combination of bureaucrats who understand both government and private sector.

He said that Federal Board of Revenue (FBR) had constituted, a committee on these lines. They have half-half representation from public and private sectors to move forward efficiently.

Ease of doing business

The minister said that owing to the comprehensive policy decisions, Pakistan jumped 28 places in ease of doing business.

He said that PM was taking charge himself. And Board of Investment was reporting directly to him. The PM was holding two meetings every month.

He said that Special Economic Zones (SEZs) would be made autonomous to provide a conducive environment to the foreign investors.

Tarin further said that autonomous status would initially be introduced in around 6 zones within next 12 months and would be replicated in other zones later.

Privatization Priorities

The minister said that the the government run around 85 companies. Out of them, 15 were making loses of around one percent of GDP.

These include airline, railways, steel mill and power distribution companies.

He said that the govt would dissociate them from ministries and hand their control to professional people.

They would overhaul them and finally privatize them within 5 years.

He maintained that in developing countries like Pakistan, government had no job to run the businesses.

Offshore wealth

He said that people were being probed for flight of capital.

Tarin further said that the government would not spare anybody. And whoever had done anything wrong would have to face the consequences.

Pakistan-China-US relations

The minister said that Pakistan wanted to be friend with everybody including United States, China.

He said that Pakistan had major strategic partnership with US and its friendship with China would not affect its relations with US.

“We believe we can work with both powers equally.”

He said, Chaina had helped us to build infrastructure and that does not mean Pakistan had become China-Centric.

“We are open and want to do business with china, US, Europe, Japan, Korea. We are open country. There should be no misconception,” he cleared.

Moreover, he spoke on China Pakistan Economic Corridor (CPEC).

The minister said that Pakistan needed to build infrastructure to attract foreign investments.

Since Pakistan was not in position to build such huge infrastructure, so China provided funds and helped us in building roads, railways, power generation, and other infrastructure, which generated economic activity.

To a question, the minister said that companies from China, United States and Pakistan remain engaged joint ventures in some projects.

They are collaborating with each other. This cooperation could be enhanced.

Gwadar Port

The minister again made it clear that Gwadar port was not China-Centric, saying that it was open to everybody including Japanese, South Koreans, Europeans.

He said, if anybody wants to have business with African countries and Central Asia States, Gwadar was the right place.

The minister said that the government wanted to attract investment form different counties and that was why it had developed infrastructure.

Finance Minister Tarin links trade with India to Kashmir dispute resolution

He named Gwadar as a big opportunity and a unique territory covering Gulf, Central Asian republics and even distance to china also short from this port.

He said any country can come and invest.

Tarin said Pakistan has been making efforts to attract people from different countries to invest in economic zones. And also approaching overseas Pakistanis for this purpose.

However, he also underlined need for peace and stability in Afghanistan.

He emphasized stable Afghanistan good for all.

Moreover, he urged world community to help make Afghanistan manageable for benefit of all.

FATF Grey List

The minister said that Pakistan had met 26 out of 27 Financial Action Task Force (FATF) conditions and the 27th one was also half met.

He said, any other country meeting such conditions would have been removed from the grey list.

However, some countries are punishing Pakistan for different reason, not economic reasons.

Tarin said that frankly, it remains same mantra that portrayed Pakistan as a terrorist state. They portrayed as though Pakistan encourages terrorism.

He lamented blame game against the country which lost 80,000 people and suffered $150 billion loses and suffering for 40 years.

Future of Pakistan

The minister said, no amount of hurdle would stop us to making Pakistan economically great again.

Nobody could hamper Pakistan to become one of the top countries in Asia first and then world.

Tarin further said that in our lifetime if we make Pakistan one of the top countries economically in Asia that would come as an achievement.

GTV