Prime Minister Shehbaz Sharif on Tuesday stressed the need for an economic charter, saying all stakeholders must work together in formulating a framework to achieve economic growth.
He made these remarks while speaking at a one-day pre-budget business conference hosted by the government to explore the path to consensus-based economic action.
In his speech, the prime minister said fiscal management was essential to boost exports and agricultural yields.
“We will all have to move collectively. Governments need the guidance of stakeholders and experts. The government will form a task force for agriculture and export to come up with a comprehensive plan,” he said.
Prime Minister Shevaz said the government has about 15 months to take short- and medium-term measures on the economy.
He regretted that while Pakistan lags behind the rest of the world, the rest have followed their development plan well.
He said Pakistan is blessed with talented people who can imitate India’s success in the IT industry. Prime Minister Shehbaz said he had directed Minister of Information Technology Aminul Haque to increase IT exports to $15 billion over the next two years.
“You can’t make progress until you set ambitious goals,” he said.
He went on to say that development plans cannot be realized until there is political stability. The Prime Minister also stressed the need to focus on exports and improve the agricultural sector.
He said he was trying to “repair” relations with friendly countries that had deteriorated during previous administrations. “I spoke with China, Japan, Turkey and other countries and invited them to invest in Pakistan.”
He urged the business community to expand his support for these efforts.
Pakistan needs $41 billion over the next 12 months and I’m sure ‘it will happen’: Miftah
Meanwhile, Finance Minister Miftah Ismail said it would need $41 billion over the next 12 months, adding that he was “very confident” that this would happen.
“I have to pay off $21 billion next year. I think the current account deficit will be capped at $12 billion. […] I think you should prepare at least 3 months. […] So we need 41 billion dollars over the next 12 months, and I think it will be.
He said the government of Shebaz Sharif rejoined the International Monetary Fund (IMF). “We have talked to them and we are very confident that we will reach an agreement with the IMF soon. We are very confident about that.”
He went on to say that the current coalition government has made a difficult decision to stabilize the economy. “It’s not easy for any Prime Minister to allow us to double the price of fuel we have by 30 rupees each, but diesel is losing 84 rupees per liter and gasoline 69 rupees per liter.”
If we had continued to provide fuel subsidies, the loss would have been Rs 120 billion per month, the minister said. He said the cost of running the Pakistani government was just over Rs 40 billion.
“We were spending three times the government’s operating expenses on this subsidy,” he said, adding that it was against the agreement the former government had with the IMF.
He argued that the former government promised not to subsidize fuel to the IMF, but to impose a surcharge of Rs30 and a sales tax of 17%. “If I had followed the pact [inked] Shaukat Tarin and Imran Khan would have kicked me out of my job, or gasoline and diesel would have cost 300 rupees.”
He reiterated that the former government “traps” the current rulers by providing fuel subsidies. But he convinced businessmen that the government would stabilize the economy.
“We will make a difficult decision because this is our country. It is our job to stabilize it and we will put it in a better state,” he swore. He also emphasized that the government has recently cooperated with Saudi Arabia, China, the United Arab Emirates and other countries for this purpose.
Ismail said the government has prepared a “very progressive budget” but will also focus on fiscal control and consolidation while promising to cut the deficit.
He suggested that Pakistan’s growth model is incomplete because the current account deficit has always been a problem for economic growth. “Our imagination is limited and the finance minister meets people like you to make the chaebol richer,” he told business owners.
“That way you increase your income because the consumption basket is very large,” he said.
The Minister said the average debt over the tenure of the PTI government was Rs 5,177 billion, while that of PML-N was Rs 2.132 billion, used for infrastructure development.
He said that over 71 years, the country’s rulers, including military dictators, have borrowed Rs 250 billion, while the former prime minister has borrowed Rs 200 billion over four years.
“This is 80% of all loans received by the entire government of Pakistan over the past 71 years,” he added, adding that debt repayments have increased. “The more you borrow, the more you pay.”
Talking about the problems facing domestic businessmen, he said the government will ensure gas and electricity supply. “In the electricity sector, the government has subsidized 1.72 trillion rupees, which could increase up to 1.1 trillion rupees,” he said.
“If we don’t reform the electricity sector and bring good governance, it will be an albatross hanging around our necks.”