| GEO Business|
| Hafeez ignorant enough to see causes of inflation|
| Updated at: 0733 PST, Wednesday, June 30, 2010|
ISLAMABAD: Finance Minister Dr. Abdul Hafeez Sheikh has said wheat and sugar prices have declined by 45 and 40 percent respectively all over the world, but he expressed ignorance over causes of alarming price hike of such basic amenities in Pakistan, Geo news reported.
He also sought proposals from finance ministry officials in regard to extend relief to people and to solve food crisis in Pakistan. The Economic Coordination Committee (ECC) which met under chairmanship of Dr. Abdul Hafeez Sheikh concluded its meeting in no results.
ECC on Tuesday rejected the proposal to export two million tons of wheat at reduced rates, saying the government was not interested in benefiting foreign consumers, a senior official who attended meeting told Geo news.
Under the proposal of the Punjab government, two million tonnes of wheat was to be exported. But this would entail a loss of Rs 27 billion in subsidy, as the wheat price in the international market is much lower than in Pakistan.
Many ECC members were of the opinion that instead of benefiting foreign consumers, the same amount be distributed at subsidised rate through the Utility Stores to benefit the poor. Another proposal that came under discussion was that this wheat be distributed among the poorest of the poor through the Benazir Income Support Programme (BISP).
The ECC has constituted a three-member committee comprising secretary finance, secretary food and agriculture and secretary commerce, which will submit its recommendations in a week on how to handle the surplus 2 million tonnes of wheat in a manner that benefits the poor.
To a question, the official said that the Punjab government had procured 10.7 million tons of wheat as against its capacity to store 6.5-7 million tonnes of the commodity. Some wheat is stored in private stores but two million tonnes of wheat is surplus.
The meeting noticed that sugar prices in internal market had fallen by almost 50 per cent during the last four months. Similarly, the wheat prices in the world market fell by 45 per cent, from $300 down to $190 per tonne.
The ECC, which met under the chairmanship of Finance Minister Dr Hafeez A Shaikh, also discussed the import of sugar but the official refused to give any information about it except saying that the government wanted to provide maximum benefit to the people.
The issues of fixing of POL price by oil marketing companies and refineries and import of LNG through the Mashaal Project have been deferred till Thursday. An official press release said the ECC was briefed on the key economic indicators. It was told that various economic indicators had shown signs of improvement. The Quantum Index of Large-scale Manufacturing (QIM) registered a positive growth of 4.5 per cent during July-April 2009-10, against negative growth rate of 8.2 per cent during comparable period last year.
The trade deficit improved by 9 per cent to $13.9 billion in July-May 2009-10 from $15.3 billion in the same period last year. The workers’ remittances amounted to $8,064 million in July-May 2009-10 as against $7,076 million over the same period last year, showing an increase of 14 per cent.
Regarding the World Bank loan for reconstruction of berth 15 to 17 A and SRB’s 1 & 2 at the Karachi Port, the ECC decided that the proposed World Bank loan be lent to the KPT at a rate of 8.2%. The loan shall be repaid by the KPT in US dollars over a period of 30 years.
The ECC was informed that during July-May 2009-10, the average CPI-based inflation stood at 11.6 per cent as against 21.6 per cent in the same period last year.