Govt taking bold steps for economic revival: Dar

Finance Minister Ishaq Dar on Tuesday said the government has taken a bold initiative to settle the circular debt.
He added that the government has come to the office with a clear economic vision that will guide our economic policies throughout our tenure.
“I understand that this is the second of such conferences and that more such conferences may be arranged depending on the demand from the two sides” he said in his opening remarks at Pakistan-US Business Opportunity Conference here,” adding, “We welcome this initiative and it is for this reason that the Government of Pakistan has 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 committed with the parliamentary business of budget approval, is a clear signal of our commitment and support for the conference.”
Welcoming business leaders from both countries who have joined in this conference, he said that he saw top business groups from Pakistan and he was sure equally formidable groups would be participating from the US side.
This second conference is taking place at a time when a new democratic government has assumed office after getting a very strong mandate from the people.
“Our economy is facing a number of challenges and we are aware that unless we overcome these challenges the road to progress will not be smooth. I will not discuss all these challenges, but I would single out two challenges that are most relevant for the occasion; and something the participants would like to know how the new government would tackle them,” Dar added, “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 pre-empted by government borrowings, leaving little room for the private sector to invest and growth. It needs no elaboration that without a serious effort to correct these imbalances, realistic hope of economic turnaround will not be possible. Much of initial efforts will be devoted in putting a set of policies that will correct these imbalances.”
Second, he observed that Pakistan’s identity as an economy with a stable policy framework was 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 such 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.
“Yet many cross-cutting subjects – power transmission and distribution, gas transmission and distribution, airlines, railways, shipping, ports and highways – remain firmly in government hands with the result that even those positive externalities that we should have experienced from previously created space have not given us the kind of benefits everyone expected. That is just one aspect; the regulatory regimes remain obstructive, cost of doing business is high and taxation policies and administration are not business friendly,” he maintained.
“I had the opportunity to unfold this vision in my budget speech. Briefly stating 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 population,” he said.
“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. And we are confident that this definitive character of Pakistan will soon be a reality,” he added.
“Let me also acknowledge the strong economic partnership we have with the Government of the United States of America. This conference is part of this partnership. 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. I am particularly pleased to note the key areas that this conference is focusing on, namely energy, agriculture and textiles. All of them offer huge economic opportunities both for investment and trade,” he also said.
“On the energy side, let me note that despite having started well in introducing private power in Pakistan we could not carry the process to its logical end and in the process began to fall short on making payments to IPPs. I don’t want to go in any detail, but I would just like to point that our government has taken a very bold initiative to settle the circular debt and are taking steps to ensure that it will not recur in future. This one step should help raise the confidence of investors and process of investment in this critical sector should resume,” Dar 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 would urge all of you take a good look at them and be the first to line up for them,” the minister underlined.