The Finance Ministry has refused to allocate funds to the Commerce Ministry for "extravagant expenditure on unnecessary activities" under the guise of Textile Policy initiatives, reliable sources told Business Recorder. The Commerce Ministry had sought Rs 60 billion from the Finance Ministry for its three-year Strategic Trade Policy Framework (STPF) 2012-15 drafted without taking account ground realities and trade ties with the neighbouring countries, especially India.
Critics, however, argue that since this government is completing its tenure in a couple of months, hence formulation of new Trade Policy should be left to the new government. The Commerce Ministry was scheduled to announce Trade Policy or STPF in July this year but proposed weak policy initiatives were neither attractive to the Prime Minister Raja Pervez Ashraf nor Finance Division and Planning Commission.
"The Ministry of Finance supports the Commerce Ministry's efforts to accelerate exports and promote domestic commerce provided that it does not result in huge expansion of staff strength and proliferation of projects under it," the sources quoted the Finance Ministry as conveying to the Commerce Ministry. The sources said, the Finance Ministry and Planning Commission have reportedly joined hands to reject most of the export-oriented initiatives of the Commerce, proposed in the STPF on the basis of different arguments.
"The Finance Ministry would consider providing Rs 10 billion over a period of three years for strategic interventions targeted to promote domestic commerce and accelerate exports for 2012-13. However, financial support for the current fiscal year would be restricted to Rs 2 billion," a senior official in the Finance Ministry told this scribe.
According to Acting Secretary Commerce, Munir Qureshi, an officer of Customs Group of BPS 21 who replaced Commerce Secretary Zafar Mahmood, Grade 22 officer of District Management Group (DMG), the export target of three years would be $95 billion which, analysts argue, is unachievable in the current global economic slump, domestic energy crisis and deteriorating law and order situation.
"The Commerce Ministry's intervention would have key performance indicators and quantitative targets which would be pre-agreed with Finance Division and Planning Commission. The outcome of the intervention would be measured/ gauged," the sources continued.
The sources said, the Commerce Ministry has proposed setting up of Export Promotion Leather Council and Services Exports Development Council aimed at focusing on these two weak sectors. According to these sources, main focus of new Trade Policy would be on domestic commerce as Prime Minister Raja Pervez Ashraf during his visit to Commerce Ministry stressed on domestic commerce which was missing from the old Trade Policy. Deputy Chairman Planning Commission, Dr Nadeem-ul-Haq also criticised the Commerce Ministry for not giving importance to domestic commerce.
Finance Minister Dr Abdul Hafeez Shaikh, who was scheduled to attend at least two important meetings on Trade Policy in the Commerce Ministry, did not bother to attend even a single meeting. Additional Secretary, Fazal-e-Abbas Makan has held a number of meetings with the officials of the Finance Ministry to convince them that funds sought by the Commerce Ministry are justifiable, but the outcome of those meetings was almost insignificant. "If Hafeez Shaikh had attended meetings on Trade Policy, then certainly it would have been approved by the Cabinet," said another official on condition of anonymity. According to Acting Commerce Secretary Munir Qureshi, he has submitted Trade Policy to the Federal Cabinet and discussion on it will be held amongst the stakeholders.
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