Multilateral donors place more confidence on Pak-economy: Dar

ISLAMABAD: Minister for Finance, Senator Muhammad Ishaq Dar has said that the economic direction of the country is positive; the multilateral donors have placed more confidence on Pakistan; IMF has revised its growth targets and we are going for World Bank IDA Programme which otherwise will lapse in June, 2014.

He said this in an interview with Jamie Robertson for Business Edition on BBC World News.

He said “we have a three year macro-economic stability programme and the targets are very clear. We are going to bring down the fiscal deficit which we call the mother of all evils, from 8% to 6.3% this year”.

He said that the next year our target is 5 and then 4 which is considered normal around the world.

He stressed that the government has undertaken numerous reforms and stabilization measures and this is the reason that the ADB, Islamic Development Bank, JICA, IFC and every body is back in business with Pakistan after three years.

Replaying to a question, the minister said that Pakistan is dealing with the security issue and the PML(N) government was elected on a manifesto of dealing with four Es; Economy, Energy, Education and to deal with Extremism.

He said that our next five years plan with the World Bank viz; Country Strategy Partnership would be revolving around these four Es.

He said that the investors go to a country if they see returns to their investment and the law and order situation. He said that we are improving on these vital elements and currently Pakistan is engaged in the dialogue process to bring peace in the country.

With the improved law and order situation there will be huge opportunity for the foreign investors, he added.

The Finance Minister said that we have drastically cut our current expenditure for the fiscal year 2013-14 and we have increased our allocations in social sector including social safety net and PSDP.

He said that we have almost doubled our expenditure on social safety net in the current budget and we intend to do more in future. Moreover, he added, that our development expenditure has increased by Rs 100 billion alone.

Ishaq Dar said that we are making massive expenditure cuts but not on developmental expenditure.

The world is a global village we cannot stand alone from the international community adding that we are bringing in multilateral donors and partners to be back in business with Pakistan and we are also assessing the bond market as we have a very small share in the international bond market, he added.

He stressed that Pakistan should have a bigger share in the international bond market.

On infrastructure development in Pakistan, he said that government is preferring the BOT basis. On energy sector we have agreed upon upfront tariffs without any confusion and waste of time

To another question about security related aid, the Finance Minister said that the Coalition Support Fund (CSF) is totally misunderstood. He emphasized that Coalition Support Fund is not assistance but it is the reimbursement of expenses incurred by Pakistan on dealing with terrorism.

The Minister said that the government of PML-N came to power for the third time has a clear road map and we do not want aid from our friends. He said that we prefer trade and investment with the international community and we would like to build our international relations on the basis of trade, investment and self-reliance.

Ishaq Dar said that the government is very clear on promoting regional trade with SAARC countries adding that our government is actively engaged with India for the last ten months, and we have almost finalized everything.

We do not want to be seen as a country supporting any political party in Indian elections therefore, we will make a decision after Indian elections adding that Pakistan will be happy to work with any political party which wins the elections and comes to power, he added.

The Minister said that during the past five years, the growth rate on average remained 3pc, which is not acceptable to us because the country’s population growth rate is 2.3pc.

He said that government intend to achieve 4pc plus growth rate in the current year and in the three years macro-economic plan we wish to take it to 6-7pc.

He said that now the IMF and ADB, after the second review, have conceded that their growth rate figures are conservative and moved up from 2.8pc to 3.1pc.

He concluded that our growth rate this year will be 4pc plus.