NA session: Hafeez Shaikh defends the financial policies of the PTI government
ISLAMABAD: Abdul Hafeez Shaikh, Advisor to the Prime Minister of Finance while defending PTI government policies in the National Assembly, said those who opted for the International Monetary Fund (IMF) program during the last two tenures should not criticize the government holder to look for The IMF package.
“The economic situation when the country was heading towards non-compliance, forced the new government to seek the IMF program,” said the Finance Advisor. He said it was not convenient for governments that took over in 2008 and 2013 benefited from the IMF program to criticize the current regime.
Shaikh said the government had to take severe budgetary measures, including cutting its expenses and freezing the defense budget. “General Bajwa and the armed forces also supported the government on the issue of freezing the defense budget,” he said, questioning whether any government made such a difficult decision in the past. He said he had been part of many governments, but none of them made such decisions.
He noted that the civil government budget was also reduced by Rs40 billion by imposing cuts in expenses such as the budget for the President’s House and the Prime Minister, while the salaries of federal and general secretaries also froze.
The Finance Advisor said it hurts a lot when someone says that the people of the IMF by the government of Pakistan negotiated with the IMF for the loan. “We should be proud of a talented man like Reza Baqir, who resigned from a senior position at the IMF and chose to serve the country,” he said, adding that those could not even enter the IMF’s corridors to criticize the IMF. .
Abdul Hafeez Shaikh said the current government obtained an IMF loan program of 6 billion dollars on favorable terms and also sent a message to the world that Pakistan was ready for financial discipline. “The confidence of the world is restored in Pakistan. Global institutions, including the IMF, Bloomberg, the World Bank, the Asian Development Bank and Moody’s are recognizing the economic performance of the government, “said the Finance Advisor.
He said some friendly countries also showed up and Pakistan managed eight billion dollars as bilateral assistance and deferred oil payments.
The Adviser said that the country was under the burden of Rs 30,000 million of loans when the acting government took over in mid-July 2018 and that it had to repay Rs 5,000 loans in the next two years.
On other indicators of poor economy, he said that the current account deficit had reached a record high of 20 billion dollars, reflecting vulnerability to threats, adding that foreign exchange reserves had also dropped from 18 billion to nine billion dollars from 2016 to 2018, while setting the dollar rate.
He recalled that the fiscal deficit when this government took over had reached Rs2300 billion, while foreign loans amounted to 95 billion dollars.
He also noted that the export growth rate remained at zero during the last five years of the last government, while the dollar rate remained low and, as a result, imports flooded the country’s market severely affecting Pakistan’s industrialization. He said that taxes also witnessed a 16.5 percent growth during the first seven months of the current fiscal year.
Hafeez Sheikh said the current account deficit was reduced from twenty billion dollars to two billion dollars, while the fiscal deficit was also reduced.
The adviser said that the government is not only focusing on improving tax collection but also on non-tax revenues.
Abdul Hafeez Sheikh said that foreign direct investment has doubled, while portfolio investment has reached three billion dollars in the first seven months of the current fiscal year. He said tourism has also doubled during this period.
The Finance Advisor said that despite the limitations, a great effort is being made to reduce the prices of essential commodities, noting that the disruption of trade with India also resulted in an increase in the prices of some perishable products. He expressed confidence that inflation will fall in the next one or two months.
A large aid package has been announced through the Utility Stores Corporation to provide essential items such as flour, rice, legumes and sugar to people at reduced prices. He said the government also planned to improve the network of utility stores from 4,000 to 6,000 in the coming months, while the number of people who benefit from the stores would also increase from five million to 10 million.
The Adviser said that a ration scheme would also be launched before Ramazan under which deserving persons will receive essential items at reduced rates of twenty-five percent through public service stores.
Hafeez Sheikh said the government increased funds for social security networks from Rs100 to Rs 192 billion, which is an unprecedented increase. He said that measures have been taken such as tightening monetary policy and not requesting loans from the State Bank of Pakistan to keep prices under control.
Hafeez Sheikh said that seventy-two percent of consumers receive subsidized energy, including exporters and those who consume less than three hundred units. He said we are also trying to verify energy theft to reduce energy prices. He said the circular debt increased Rs38 billion monthly and the government reduced that to Rs12 billion.
The advisor also rejected the impression that the sale of cars is in decline, saying that the two companies have registered an increase in the sale of their vehicles, while tractor production has also increased.