ISLAMABAD: In blistering remarks at the first public appearance since his indictment on corruption charges, Finance Minister Ishaq Dar tried on Monday to dispel the impression that the country is facing an economic emergency and will need to return to the International Monetary Fund (IMF) soon because of depleting foreign exchange reserves.
Mr Dar also dismissed all suggestions that he was disengaged from his job due to the pressure of the court case against him as well as all talk of a possible resignation. “The party and the prime minister will decide about my resignation,” he said when specifically asked the question.
“Just wait,” he said haltingly while gesturing nervously with his hand. “You will get your answer.”
The event was held at the Federal Board of Revenue (FBR) headquarters. The minister was flanked by Special Assistant to Prime Minister on Revenues Haroon Akhtar and FBR Chairman Tariq Pasha.
“There is no need to go to the IMF at the moment,” he claimed, pointing to foreign exchange reserves of $14 billion.
“The country now stands on its own feet,” Mr Dar said, adding that the focus is now on achieving the six per cent growth target for the current fiscal year. “Growth will take the economy in the right direction,” he said.
Mr Dar admitted that net domestic debt increased to 61.6pc of GDP in June from 60.2pc in 2013.
Mr Dar attributed the growth in debt to three main factors: an increase in the security cost, expanding social safety nets and high expenditures on energy-related projects.
Says debt rose due to security costs, social safety nets, spending on energy projects
He mentioned his government’s track record in bringing down loadshedding “to two hours a day from a peak of 18 hours a day”, and in the same breath brought up the improvement of the security situation.
In remarks that appeared to be responding to concerns raised by the Army Chief, Mr Dar started by praising the work of the army in bringing down the number of terror attacks. Then he added “there is a cost for this, and countries pay this cost, and we are paying it”, referring to the financial costs of the counter-terror operations under way in the country.
“Even the CSF has dried up” he went on, adding that as a responsible state, all expenses connected with security, whether operational or procurement related, “are being met, and will continue to be met.”
“Both of these are parallel costs” he said as he wound up his thoughts on security and development challenges facing the country. “And we will meet them both, God willing.”
Reported estimates for the total cost of security operations under way in the country are around Rs100bn per year.
As for a recent World Bank report that put Pakistan’s external debt servicing obligations at $31bn in the current fiscal year, Mr Dar said the global institution has admitted to the finance secretary that it had “misinterpreted the economic data of Pakistan”. “It will be corrected soon,” he claimed.
Similarly, he said social security coverage and payout have gone up and the cost of energy projects also added to national debt. Mr Dar said these expenditures resulted in a decline in acts of terrorism and reduction in loadshedding.
The minister wore a beleaguered look. He faced a few sharp questions from reporters, including one who referred to him as a “convicted minister”, although he has not yet been convicted by any court.
He highlighted the economic performance recorded during the last four years, especially indicators from the first quarter of the current fiscal year. He said circular debt stands at Rs390bn despite a substantial reduction in the hours of loadshedding. It was Rs480bn when the PML-N took power.
He said the revenue collection witnessed a year-on-year growth of 20pc to Rs765bn in July-September.
On the basis of this growth in revenue, he said, the overall budget deficit fell to Rs324bn in July-September against Rs438bn a year ago. He said it stood at 0.9pc compared to 1.3pc last year.