SUNDAY DECEMBER 04: No big change in Washington's policies: US aid will continue, says Hafeez

KARACHI: There has been no big change in US policies in relation to financial support to Pakistan and economic assistance worth $500 million from the US will continue, said Finance Minister Dr Abdul Hafeez Shaikh, on Saturday. Responding to questions about the possible stoppage of US financial support to Pakistan under present charged atmosphere at Karachi Press Club (KPC), he said the government does not believe in external economic assistance and is currently focusing on 'trade' and not 'aid'.
"We want to increase trade with the world - the only solution to economic ills....we are focusing on exploring new economic opportunities and export markets in coming years," the minister said. He said the US is not a big financier. The largest fund providers to Pakistan are IMF, World Bank, Asian Development Bank and Islamic Development Bank.
Talking about the country's present economic situation, Dr Hafeez said the government has been trying to focus on the economy for the last four years to ensure economic stability in the country and now economic indicators are showing stability in Pakistan. Tax collection has also improved with government efforts to enhance tax-net and bring rich people under it. "Economic stability and increase in tax collection will ensure self-reliance," he added.
The minister said the country has seen toughest times in the last four years on political and economic fronts but all these challenges made the country strong. Pakistan is going through a transitional phase, which is slow but necessary for a stable future of the country, he added. During the first five months of current fiscal year, the revenue collection registered an increase of 28 percent and record Rs 640 billion tax collection is above target, he said. "With current tax collection direction, we are confident that annual tax collection target of Rs 1,952 billion will be achieved. This years, the tax collection target is higher by 25 percent over last year's Rs 1,558 billion," the minister added.
However, he expressed concern over the rising burden of power subsidy saying that the government is providing electricity to consumers at a less than the actual cost. The largest burden in last four years on the national economy had been Rs 1 trillion for the subsidy payment and losses of state-run power entities. It was only because of inefficiency and corporate misgovernance, Hafeez said.
The government wants to bring reforms in power sector and it is expected that loadshedding will gradually reduce in coming years, he said and added that "at the same time we also need to enhance the role of private sector in state-run power sector organisations to improve their performance and reduce losses. Under the targeted subsidy programme to ensure that the poorest segment of the society should not be left behind, the federal government paid Rs 50 billion under Benazir Income Support Programme to poor under a cash transfer scheme, the minister pointed out.
He said an additional Rs 800 billion are being provided to provinces under the NFC Award and now the provinces are getting 60 percent of the total national resources while the federation is getting only 40 percent from the national kitty. Replying to a question, the minister said the government has made the State Bank more independent to devise monetary policy without any pressure or dictation and other institutions like SECP, Nepra, CCP and PTA have also been made independent.
Hafeez said Pakistan was facing numerous threats to its security and the government will cut its budget as well as of other sectors to ensure national security. He emphasised the need for unity among all the institutions in the country to face all the internal and external challenges. On the occasion, Karachi Press Club Secretary Moosa Kalim and President Tahir Hassan Khan were also present.