Economic managers urged to find out of box solution: Export sector needs revamping: Tarin

Former Finance Minister Shaukat Tarin has urged the government's economic team to think outside the box in terms of raising exports as they are unlikely to rise due to rupee depreciation alone, adding that the export sector requires revamping. Speaking at Aaj News programme 'Paisa Bolta Hai with Anjum Ibrahim' Tarin said the government needs to sit with experienced people to formulate a roadmap as "no one knows what the roadmap is."
He suggested taking onboard stakeholders from the private sector to develop a roadmap with a buy-in of every one to put the country on a growth trajectory of 5 to 7 percent. Former finance minister said that he was not worried about borrowing the required amount from the external sector after Pakistan went on the International Monetary Fund (IMF) programme as being on a Fund programme automatically raises inflows from multilaterals and bilaterals. Besides, he added, there has been a decline in the current account deficit but emphasized that he is concerned about the fiscal side as Rs 5.6 billion revenue target is not realistic.
Tarin pointed out that interest rate has been raised to 13.25 whereas rate of inflation is 10 percent. He expressed his bafflement as to why the government is going for overkill. Tarin added that the debt of Rs 31 trillion would cost the country an additional Rs 930 billion in debt servicing. However, he acknowledged that the current account deficit has decreased considerably during July 2019 due mainly to the operationalisation of Saudi oil facility and demand squeeze.
He said that there is need for informing people that their life has been made difficult but there is a light at the end of the tunnel. People and businesses, he added, are not seeing the light. Tarin said that business is at standstill. He requested the economic team to share a coherent growth strategy with the people to increase their hope that things would improve after two years of stabilization. He said Hafeez Sheikh during his previous stint as the Finance Minister was a 'bit soft' and failed to convince the PPP leadership to take difficult decisions and was unable to implement VAT. At present he has the full support of Prime Minister Imran Khan who has put his political capital on the line - a situation that should be conducive for Hafeez Sheikh to take challenging decisions.
Tarin said that when he assumed office in October 2008 the current account and fiscal deficits were out of control with monthly current account deficit was at $2.5 billion and exchange reserves no more than for a few weeks of imports. The country was on the verge of default in two months time.
The first thing he did as finance minister was to straight away go on the International Monetary Fund (IMF) programme which was front loaded with 40 percent of the total $7.2 billion disbursed upfront. The Stand-by-Arrangement was eventually enhanced to $11.5 billion. This brought stability to market sentiment and exchange rate and subsequently expenditure was reduced and effort was made to broaden the tax base.
He said that within one and half year of his tenure as finance minister fiscal deficit was reduced to 5.2 percent. Former Finance Minister stated that during his tenure there was a global meltdown and no chance of an increase in exports or foreign direct investment so he decided to launch Pakistan remittance initiative in 2008 after an in-depth analysis. Remittances began to rise through formal channels and during the last 11 years remittances rose from $5 billion to $21 billion, he added.