Reforms on agenda, no decision yet for any bailout package: Assad

ISLAMABAD, Aug 7 (APP):Determined to introduce fundamental reforms for steering the economy in the right direction,
PTI Central Leader and finance minister-in-waiting, Assad Umar Tuesday said the decision
to go for any bailout package would be taken after analyzing the official economic data,
which is not accessible to them so far.
In his first formal interaction with economic reporters at Pakistan Tehreek-e-Insaf’s
(PTI) Central Secretariat, Assad Umar said that he did not have access to official data
on the basis of which a decision regarding any loan package, could be made.
However, he was of the view that there was urgency to take immediate decision
adding by September, his government would have to decide on this issue.
He said many options were available to the government to plug the economy’s
widening current account gap including commercial borrowing, taking bilateral loans
from countries or going to International Monetary fund (IMF), however the decision
would be made after analyzing the data.
He said the government would evaluate all options in parallel and eventually take
decision.
He said that the country was facing $2 billion current account deficit monthly for
the last three months which earlier was the deficit of whole year. “What we were
losing in a year, we are losing it in a month now,”
He lamented that no fundamental reforms were introduced during the past five
years to put the economy on sustainable grounds adding that fundamental reforms
were direly needed to move the economy in right direction.
He said economy could be strengthened by attracting investments from overseas
Pakistanis adding the PTI has strong support of overseas sentiments as they fully
support PTI and Imran Khan.
He said the government would have an opportunity to launch bond or Sukuk by
making an investment instrument for overseas Pakistanis to reduce risk and give
them good returns.
Talking about the budgetary proposals presented by the previous government,
he said there was not any decision taken so far whether the PTI government would
continue with the budget or come up with new one, however he added that the targets
fixed in the budget, were not realistic.
“Whether there is formally going to be a new budget or not, we have not yet
decided,” he said.
He said during the last one year, the economy was run on political motivations
and was put on high risk in order to win elections.
He said that the budget deficit, which was targeted at 4.1 percent, had reached
as high as 7 percent and there had been flaws in fiscal and monetary policies.
He said that when the PTI government holds reins of power, it would reduce
reliance on indirect taxes which have been putting burden on common people and
would increase taxation besides making businesses and agriculture sectors
competitive.
He said that indirect and withholding taxes constitute about 90% of total tax
collection.
He said that his government would introduce reforms in FBR by separating the
tax and administration set-ups. In addition, an integrated professional would be
made chairman/chairperson of the board who would make his/her own team to
make this important organization effective.
He said that there have been issues of large-scale tax evasion and corruption
practices in Federal Board of Revenue (FBR).
On the privatization issue, he said that his government would run the public sector
entities on professional lines, instead of maintaining status quo by running them under
relevant ministries, adding professionals would be given charge instead of bureaucrats.
He said the government would have to create fiscal space to help the bleeding entities,
including PIA and Pakistan Steel Mills, come out of the crisis. He said that three conducted
feasibility studies, did prove that PSM could be a profitable organization
To a question whether China provided $2 billion loans to Pakistan, he said that he had
read it through newspapers adding that he had meeting with Chinese Ambassador and
discussed with him the status of China Pakistan Economic Corridor (CPEC), its performance
and future prospects.
He highlighted the importance of introducing the culture of transparency where the
government is answerable to people. He said that transparency would be ensured through
making the agreements public unless and until the data is of very sensitive or secret nature
or there is any binding by agreement between two countries not to reveal it.
He said that the CPEC agreements should have also been brought before the
parliament.