Wednesday Feb 12, 2020
Adviser to the Prime Minister on Finance and Revenue Abdul Hafeez Shaikh on Wednesday said that Pakistan needed to learn some hard lessons from the mistakes it had made in the past in order to leapfrog ahead of other nations as a developed and sustainable economy.
Speaking at a session of the National Assembly in Islamabad on Wednesday afternoon, the adviser to the premier outlined the benefits of the economic policies of the incumbent government, and said that the current setup had taken some truly historic decisions.
"We should learn as to how some peoples and nations are ahead of others in terms of development. If we look at them, there are some stark realities that become clear about Pakistan. These realities are not related to military or civil governments," he said.
"One of these realities is that not a single prime minister has completed their designated tenure in the 72-year history of Pakistan. Liaquat Ali Khan remains the longest-serving premier in a single term. If we talk about sustainability and predictability, we should keep this in mind," he added.
"The second big challenge we face is the development of our people. There is not a single country in the world where the people are not educated, not skilled, and ignored, while the land prospers. If we want to stand with developed nations of the world, we need to pay attention to our people," he noted.
"The third problem that has historically plagued Pakistan is the issue of exports. Pakistan has found it very hard to sell its products worldwide, or to convince businesses to come and invest in the country. Countries like China, Malaysia and Korea have developed by doing business with the world," he maintained.
According to the adviser to the premier, another pressing issue for Pakistan was the abysmal rate of tax collection. "We have always been dependent upon other countries despite being an independent country," he said, adding that revenue collection has not kept with increase in business and wealth.
"There have been periods in this country where the economy improved, and growth took place. But this growth could not be sustained for longer than 3-4 years. If there was some growth in the 1960s, it vanished after 3-4 years. And if it came in the 1980s, it proved unsustainable too," he noted.
"So we have to understand why Pakistan can achieve a high growth rate but is unable to sustain it. If we take the example of China, it had a growth rate of 10 per cent for a long period of time. If we are unable to answer these questions collectively, there would be no growth," he warned.
Taking a swipe at opponents who challenged the government on going to the International Monetary Fund for a bailout, Shaikh said that those who could not get into the corridors of the IMF were criticizing the world body, noting that the government went to the IMF to repay previous loans.
"When this government came into power, there were some fundamental problems with the economy. There was a 30 trillion rupees loan on the country. When the government came into the power, it had to return 5000 billion rupees in loan payments in two years," he said.
"The people who cannot even go into the corridors of IMF are criticizing the IMF. At IMF, an MNA cannot phone a secretary and get someone a job. We salute all Pakistanis who come back and work for the country." he added, speaking of the Governor State Bank of Pakistan Reza Baqir.
In his speech, Shaikh forcefully noted that the incumbent government had taken some truly historic decisions in the larger interest of the country. "This government took the hard decisions to decrease government expenditures and freeze the budget of the armed forces," he noted.
"The army, including Chief of Army Staff General Qamar Javed Bajwa, supported the government when it had made these decisions. Has anyone taken such a decision before in Pakistani history?" the adviser to the PM on finance asked the members of the assembly.
"Another decision was the decrease in the budget for the civil government. A 40 billion rupees decrease was ordered in the budget of the civilian government. The budget of the PM House was slashed. the budget of president house was slashed too, and the salaries of the cabinet members was reduced," he said.
"The salaries of generals and secretaries were frozen as well. These are big decisions. I have been a part of many governments. Nobody used to take these decisions. To mange expenditures, we prepared a tough budget," Shaikh said in his speech.
Despite the tough budget, Shaikh said that the incumbent government had increased the amount allocated for social safety nets from Rs100 billion to Rs192 billion. "We realized that the tough budget would be harder on some people than others, and we took measures in this regard," he clarified.
"We wanted to allocate as much amount as possible for exporters and the poorest of the poor. For the poor, we allocated money for a number of projects, including disbursement of cash to deserving women, small loans for the youth, and healthcare for poor as well," he said.
"For exporters, we declared there would no tax on exports. And we also decided to subsidize electricity for exporters. Gas was also subsidized for exporters. Exporters were given loans on lower interest rates, and more than 1600 lines of raw material were declared tariff free for them," he added.
"Exporters are the friends of the government and the soldiers of this country. Because of our policies, exports have registered an increase over the past few moths after zero growth over the past five years," the adviser to the premier told the assembly.
"We have also managed to address the problems related to the current account deficit. Non-tax revenue has increased as well, and will exceed the target set for this year. The exchange rate has stabilized. People from abroad are now showing confidence in Pakistan," Shaikh noted.