ISLAMABAD: Advisor to Prime Minister on Finance and Economic Affairs Shaukat Tarin said on Monday that the International Monetary Fund (IMF) review meeting in Dubai has appreciated Pakistan’s home grown economic stabilization policies and the country would get second tranche of US $ 840 million by the end of the current month.
He stated this at a news conference here at the Media Centre of the Press Information Department, which was also attended by Secretary Finance Dr.Waqar Masood Khan and Principal Information Officer (PIO) Shabbir Anwar. Shaukat Tarin said that IMF under Standby Arrangements has approved US $ 7.6 billion for Pakistan out of which the first tranche of US $ 3.1 billion was received in November, 2008 while after the successful quarterly review meetings held in Dubai recently Pakistan would now get second tranche of US $ 840 million.
He said that Pakistan would negotiate and lobby for enhancing IMF funding quota from 5 times to 8 in the IMF Executive board meeting to be held in April this year. Shaukat Tarin while linking economic stability to political stability called upon all the political forces to play their role in the achievement of the objective for the socio-economic prosperity of the country.
He said when there would be political stability in the country huge investments in different sectors would come, generate economic activities and create job opportunities. The Advisor to the Prime Minister on Finance however said that Pakistan’s political situation did not come under the discussion of IMF review meeting.
Shaukat Tarin said that Pakistan plans to attract investments of Pakistanis living abroad by giving them incentives in the country for their investments. He added that due to government’s economic stabilization programme the macro economic indicators are improving and investors are bringing back their investments and capital in Pakistan.
Workers remittances are also increasing at the rate of 18 percent, he remarked. Terming inflation the biggest enemy for the people, especially the poor he said efforts are being made to bring it down to 10 percent by end of the current fiscal year.
Advisor to the Prime Minister on Finance and Economic Affairs, Shaukat Tarin said that when he took over the charge of his office, the foreign exchange reserves were declining due to the turmoil in the international markets. He added that in this situation Pakistan has no other option but to go to friends, multilateral agencies including IMF.
He further said that due to deterioration in our macro?economic indicators, the multilateral agencies including the World Bank and others were very reluctant to give us funds before going to the IMF. Shaukat Tarin said “Our own targets for stabilizing the economy were also very aggressive” and to achieve the targets were skeptic for our own friends”.
He said that we were lucky enough for negotiating with the IMF on Pakistan’s own terms except one which was raising of the interest rate by 2 per cent. He further said that during current financial year fiscal deficit would be reduced to 4.3 per cent.
Shaukat Tarin said that IMF has agreed to reduce interest rates, if the inflation in the country comes down. He said that the foreign exchange reserves have increased to over US $ 10 billion in the country while there is also marked improvement in the performance of our stock market.
He added that projected growth rate during the current financial year was 3.5 percent but the target has been reduced to 2.5 percent. The Advisor to the Prime Minister on Finance said that this year country has achieved good wheat and rice production, however there is low growth in the manufacturing sector besides global recession impacting on our exports.
He added that decline in the export has also put a negative impact on our balance of payment position. He said that Federal Board of Revenue is also facing the shortfall in the revenues and tax to GDP ratio during current financial year would be at 10 percent. He said that revenue target of Rs.1360 million has been reduced to Rs.13 billion for the current financial year, however, stressed the need for broadening of the tax base in the country for reducing fiscal deficit.
He expressed the hope that government would be able to achieve its economic targets adding that measures are being taken to reduce the Current Account Deficit. He added that by the year 2010?11 the economy of the country would further be strengthened and improved.
Shaukat Tarin said that the decreasing trend in the oil and food prices in the international market would provide a cushion and relief for further improving the national economy.He said under the nine?point economic agenda, the government would ensure alleviation of poverty, promotion of agriculture, manufacturing, human resource development, public?private partnership (PPP) improving the efficiency of government functionaries and energy stabilization on sustainable basis in the country.
He added that government has introduced Banazir Shaheed Income Support Programme for provision of safety net to the poorest section of the society and plans to further extend it. He said that government is providing sugar at Rs. 38 per kg through Utility Stores Corporation (USC) and ECC has also allowed the import of the commodity for stabilizing the prices of sugar in the country.
He added that government is providing Rs. 65 billion subsidy on electricity annually to the consumers. He said that PEPCO has been asked to improve its efficiency. He added that in case of any decision in the withdrawal of the subsidy government would not put a heavy burden on the public in the tariff rates. Replying to a question, he said Pakistan would get US $ 1.1 billion under Coalition Support Fund from the United States shortly for fighting war against terror.-SANA