ISLAMABAD: The finance minister-in-waiting in the coming PTI-led government, Asad Umar, on Tuesday said they will consider launching dollar-denominated bond and Sukuk bond to tap a favorable response from expatriates in order to tackle the looming crisis on the external front of the economy.
“All options are under consideration, including getting borrowings from commercial, bilateral creditors and seeking the IMF support, but its exact size will be worked out after getting the latest estimates of the Ministry of Finance. We will establish the Wealth Fund to exclude loss-making public sector enterprises (PSEs) from clutches of politicians and bureaucrats and reform them to curb their cash-bleeding,” he said while talking to reporters at the PTI office here.
Asad said the coming government will have to take tough decisions in first six weeks after coming into power. “Pakistan requires financing gap of around $12 billion but this money is not required immediately,” he said.
Asad promised to grant independence to the Pakistan Bureau of Statistics (PBS) in order to get reliable official data on various sectors of the economy. He pledged to take action on it in the first 100 days of PTI-led government.
“Our focus will be on curtailing the trade deficit and creating jobs,” he added. He said the government will look into key appointments of different institutions except those where constitutional guarantees were involved.
Asked how the government will establish the Wealth Fund without its inability to secure a legislation from parliament because of its thin majority, he said they did not require changes to the law to undertake such steps.
To a query about rolling back the CPEC projects, he said there were sovereign guarantees given by the previous elected government so they did not have any plan to scrap any agreement under the CPEC.
He said there was nothing to hide in the CPEC projects and recalled that he had filed a petition seeking details of rate of return on energy projects from Nepra. China, he said, had provided $2 billion to Pakistan as he read it in newspapers but it made no commitment for providing more dollar support to Pakistan’s ailing economy.
Asad said instead of focusing on lollipop for the sake of popular measures, he would focus on undertaking required reforms to improve the macroeconomic indicators and then relief would be provided to the masses.
Asked about out-of-box solution to fix the current account deficit, he said after the PTI’s victory in the elections, there was a growing demand among the Pakistani diaspora that they wanted to contribute something to Pakistan and in a bid to tap this favorable condition, the government will launch dollar-denominated bond and Islamic Sukuk bond by offering the overseas Pakistanis to invest and get better rate of return.
“We may consider the National Savings, defense savings, bond or some other instrument that can be used to get dollar inflows,” he added. Asad Umar said the SBP foreign currency reserves stood at $10 billion and debt retirement requirement was hovering in the range of $8 to $9 billion so the actual reserves were close to nothing.
The situation has touched such an alarming position as the current account deficit (CAD) used to be in the range of $2 billion on per annum basis, which now peaked to $2 billion on monthly basis.
Asad said he had always criticised the previous government led by PML-N for wrong economic policies but he would not even spare the IMF because no fundamental reforms were undertaken under the last IMF sponsored program.
He said the debt to GDP ratio stood at 63-64 percent in 2013, which jumped up by 10 percent of GDP and touched 73 percent of the GDP in the last five years from 2013 to 2018.
He said the previous government provided Rs150 billion to the Pakistan Steel Mills but did not provide them with Rs80 billion to keep PSM afloat by increasing its production capacity. He said circular debt again increased to Rs550 billion and its penalty was causing Rs22 billion as additional burden but the government did not clear it to show a decreased budget deficit. He said PIA could not run with debt burden of Rs367 billion so the Ministry of Finance will have to find out solutions.
Five thousand kilogrammes of hashish, heroin, bhang and ice worth Rs2,634.44 million were destroyed
Programme approved during recent UAE government annual meetings under directives of Emirates Genome Council
Atta Tarar congratulated Pakistan team on winning ODI series against South Africa
PIA spox says airline was working to rejuvenate its aircraft, bringing them back into operational fleet
Authorities confirm driver’s death, saying he “committed suicide while the train was moving”
Murad stresses need to protect country from external conspiracies, in line with Jinnah’s vision
