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Wednesday, September 28, 2011
Trade, not aid, key for economy: Shaikh* Finance minister says aid handouts not a long-term solution
* Promises to expand tax base
* Says Pakistan will have no trouble repaying IMF loan
WASHINGTON: Finance Minister Abdul Hafeez Shaikh said on Monday that trade, including with rival India, would be key to turning around the country’s economy, saying that aid handouts were not a long-term solution.
Shaikh, on a visit to Washington for annual IMF and World Bank meetings, also repeated promises to expand the tax base in Pakistan where many wealthy citizens pay virtually nothing to state coffers. “We are not looking for (a) perpetual kind of government-to-government help. What we are looking for is a chance for our people to be allowed to compete with the rest,” Shaikh said at the Atlantic Council think tank.
“We feel if we are simply allowed to trade like other countries, if barriers are not imposed... we will do just fine,” he said. Shaikh said that Commerce Minister Makhdoom Amin Fahim, who is on a visit to India, was given flexibility to negotiate on trade with Pakistan’s arch-rival whose economy has posted soaring growth since the 1990s. “I think that no country, no region of the world, has really shown true development if regional ties are not on a solid foot. That’s a lesson of experience that we want to learn and we want to adopt,” Shaikh said.
Pakistan last year signed a trade agreement with Afghanistan. Pakistan has also been pressing for years for greater access to the US market for textiles, hoping that the private sector can lead its economy forward. The International Monetary Fund has forecast growth of 3.8 percent in the current year in Pakistan, which was devastated last year by floods and has been hit hard by violence linked to extremism.
The United States in 2009 approved a five-year, $7.5 billion-dollar civilian assistance package for Pakistan, but some US lawmakers have sought to cut civilian aid due to concerns over extremism. Admiral Mike Mullen, the outgoing chairman of the US joint chiefs of staff, charged last week that Pakistani intelligence was involved in attacks on US interests in Afghanistan. Shaikh voiced gratitude for assistance by the United States and other foreign countries but played down the importance for Pakistan’s bottom line.
The IMF bailed out Pakistan with an $11.3 billion loan package launched in November 2008 as the country faced bloody attacks along with 30-year-high inflation and fast-depleting reserves. Shaikh vowed that Pakistan would repay $1.2 billion due in the current financial year, noting that the country’s foreign reserves have since rebounded to record highs. “I think there is no danger or threat of Pakistan not having funds to pay back IMF,” he said. “Pakistan has a history of always paying the payments on their debts, so it is I think not even an issue that is of concern to us at this point,” he said. afp
Courtesy www.dailytimes.com.pk