–Party’s nominated finance minister says bailout package must for immediate relief, Pakistan will approach IMF, China for help
–Says PTI will introduce Net Wealth Tax to broaden tax net
ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) has vowed to respect all sovereign agreements signed by the Pakistan Muslim League-Nawaz (PML-N) government, including the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) and its linked projects.
In an exclusive interview with Pakistan Today, PTI’s nominated next finance minister Asad Umar said that the PTI would ensure continuity of CPEC to ensure its successful and timely implementation.
“Pakistan has been making blunders in the past by not respecting the sovereign agreements signed by the outgoing governments. The sovereign government of Pakistan has signed those agreements, whether we like them or not, we cannot tread back on it. So we would pursue all such sovereign agreements signed by the PML-N government,” he said when asked to comment on the fate of CPEC and other projects.
“In the past, we landed ourselves in internationally binding agreements and then treaded our way back. Agreements like Riko Deq and Karkey are such examples. We have paid a hefty price for not respecting these agreements. So PTI will not repeat such blunders,” he maintained.
Asked whether PTI would seek bailout package from International Monetary Fund (IMF) or China’s banks, Adad Umar said that the Asian Infrastructure and Investment Bank (AIIB) can pose a serious challenge to the World Bank but it was not a replacement for the IMF.
“The role of IMF is simple. When any economy goes bankrupt and the loans owed by it become impossible to pay back, the state moves to IMF to save itself from bankruptcy. The role of IMF is of a vendor of last resort. This is a totally different role as compared to the AIIB,” he added.
He said that China has never offered a generalised bailout to any country. However, he said, the special relationship it has with Pakistan, it does not have with any other country.
“So we will see if China could offer a bailout for Pakistan as there is always a first time. My priority would be to ensure that the best terms and conditions are available, including economic and political costs. These decisions are political and have political implications too,” he said.
Asked whether PTI believed on Look East Policy, Asad Umar said that PTI would pursue the Look West Policy too and China would be the first option for PTI when it comes to negotiating for future agreements.
“If you look at the past four years of financing flows, it is completely China-dominated including the Foreign Direct Investments (FDI). At present, we have FDI from China which is bigger than that coming from all over the world. The debt financing too is coming from China. The question that looms large is that still, Pakistan is dependent on foreign debts. We need to change the debt-based economy,” he said.
Talking about criticism on China’s interests in Pakistan, Asad Umar said that every country looks after its own interests.
“We have to do two things simultaneously. One is to get hold of a bailout package immediately when we come into power. The second thing we would do is to formalise a policy so that our industry can grow fast and we can compete for the global market trends,” he said.
Asked what different the PTI would do from former finance minister Ishaq Dar’s policies, Asad Umar said that the biggest mistake Dar made was that he overlooked the production sector and exports collapsed and imports went sky high.
“That spelled disaster. We need to give incentives to the farming community, the producers, and the growers. We have the most expensive electricity, most expensive gas and we expect our farmers to compete with the world. We need to give them a level playing field,” he added.
When asked what the PTI government would do to save Pakistan from being tagged in FATF blacklist, the PTI’s economic wizard said that the way Pakistan was added to the greylist was shady.
“The way it all unfolded, gives rise to doubts. There is a possibility of discrimination, if not a conspiracy against Pakistan. Come on, look at what is happening to Abraaj in the Middle East which is fishy too. We need solutions in our laws, implementation of laws, diplomacy, strengthening of institutions and need to work in all these fronts,” he said.
He said that Pakistan knows the weaknesses and should address them.
“When under the PML-N regime, eight billion dollars flew from Pakistan to Dubai, we had raised the issue. I followed the case in the Standing Committee but no one bothered and the government said that they do not have names. Later, when we confronted the bureaucrats with evidence, they first admitted to seven names then accepted hundreds of such cases. At present the case has been forwarded to NAB,” he added.
Explaining PTI’s plan to broaden the tax net, Asad Umar said that his party had been talking about expanding the tax net since 2006.
“Net Wealth Tax will be immediately introduced. The FBR, in its data, speaks of 3.2 million people from whom 300-400 billion rupees could be raised. If we plan to benefit the producer and the grower, we have to reduce the rates of electricity and gas and lower the rates of indirect tax,” he concluded.