Finance Minister-designate Asad Umar has said that Khan administration wants to issue dollar-denominated "Over-seas Bonds" to raise foreign exchange but did not specify the rate and maturity period as well as expected amount. Speaking at a hurriedly-called press conference here on Tuesday, Umar said that available options for the new government are to go to the International Monetary Fund (IMF), borrow from bilateral sources, take commercial loans and approach other lending agencies.
He said that the decision will be taken in September as to which option should be explored on the basis of official data. However, he said that option of Diaspora Bonds is almost final because of party''s support abroad and Imran Khan''s credibility. The dollar-denominated bonds would be similar to Central Directorate of National Savings (CDNS) certificates.
However, he was unsure about the quantum of financing required in the ongoing fiscal year and stated, "We don''t have any access to official data to know the quantum of financing gap."
"I am not going to take decision on the basis of projections," he said and acknowledged that the urgent and most immediate problem is of balance of payment subsequent to monthly $2 billion current account deficit.
Umar promised to mitigate all those issues holding back exports including Rs 200 billion exporters'' refunds stuck in Federal Board of Revenue (FBR) to reduce the trade deficit through increase in exports. He said the government will take a decision whether or not to revise economic targets set in the budget for the current fiscal year after reviewing the data.
The finance minister-designate stated that situation of external account has worsened during the last five years with debt to GDP increasing to 74 percent in 2018 from 64 percent in 2013 and trade deficit widening to $ 37 billion from $ 18 billion. Asad Umar said all controversial agreements including the LNG deal with Qatar would be made public to ensure transparency. "We are committed to greater transparency," he said, adding he is in favor of presenting China-Pakistan Economic Corridors (CPEC) projects before the Parliament.
However, at another point he said the CPEC projects are foreign commitments and there is no question of reopening the agreements unless any corruption is found in the deal, as corruption is not acceptable even to China as well. However, about power projects being implemented under the CPEC, Asad Umar said these projects between the companies of two countries are as per power policy.
Replying to questions, he said that offering immediate relief to the people in shorter run of 100 days program will be offering a ''lollypop'' to the masses as the first 100 days will set the direction and priorities of the government. He promised to reduce indirect taxes, including withholding tax which he saw over 90 percent, as they affect the most to the poor.
"We are going to bring reforms in the Federal Board of Revenue (FBR) and will bring a new chairman to increase revenue by plugging tax evasion and corruption. We will separate the tax policy from the tax administration and plug ongoing massive tax evasion and corruption," he claimed.
Asad Umar said the government will make administrative changes in the state-owned enterprises (SOEs) and free them from the line ministries and place them under the autonomous boards comprising competent persons and there will be no political interference.
Umar said that a ''wealth fund'' will be set up to run the public sector entities (PSEs) including Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM) and others, he added.
The new government would have to create fiscal space by clearing Rs 367 billion debt of PIA, as non-repayment of loan is costing 4%+KIBOR, and Rs 150 billion debt of PSM.
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