National economy was moving in the right direction due to govt’s prudent policies: Miftah Ismail
KARACHI, August 06 (SABAH): Federal Minister for Finance and Revenue Dr. Miftah Ismail Ahmed on Saturday said the government has taken measures to stabilize the economy and the reduction in the dollar’s value was influenced by ‘market factors’. He added that the central bank or the government had not “directly intervened” to reduce the greenback’s value.
Speaking at a ceremony in Karachi, Finance Minister Miftah Ismail said the import of items which support exported items has been allowed.
He said that the national economy was moving in the right direction due to the government’s prudent policies and that steps are being taken to further stabilise it.
Solving the country’s economic crisis and addressing the problems of the business community is a top priority, the finance minister assured. He urged the business community to cooperate with the government in its efforts to stabilise the economy.
He also assured that the government had not stopped payments on letters of credit that had been opened earlier and would not do so in the future while reassuring the business community.
Referring to the withdrawal of subsidies on petroleum products and power, he said it was needed in order to bring Pakistan’s economy on the right track.
Miftah Ismail said he disagreed with a KCCI member’s stance that he had something to do with the dollar’s declining value. “Neither the State Bank nor I have directly intervened (to bring the dollar down). It falls on supply-demand,” he stated. Miftah Ismail also doubled down on the government’s decision to curtail imports for the next three months, stating that it was a necessity.
“We have imposed a ban on CBU cars, mobile phones and home appliances which we will not remove till September. The restrictions on [import of items with H S Codes starting with] 84 and 85 are with reason,” he said. However, the minister said authorities were working on identifying items used by exporters for manufacturing products and their import would not be stopped.
He assured that the government had not stopped payments on any letters of credit that had been opened in the past and would not do so in the future as well.
The minister noted that the country’s imports last year stood at $80 billion while its exports were a mere $31bn. The country’s current account deficit was $17.5bn while the trade deficit, after subtracting the remittances, stood at $18bn, he said.
“If you create such a wide deficit, there will be pressure on your rupee. Today, Bangladesh has increased the price of petrol to 308 (per litre). They are also under pressure. There is a very challenging environment globally.”
Ismail said Pakistanis should live within their means and in a dignified manner instead of asking for loans. “If we have exports of just $30bn, then we should not import as much. If we do not have products to sell to the world, we should not buy things from it either.”
He said he felt ashamed when he had to meet the ministers of other countries and ask them for loans. “We were giving subsidies worth $500bn on petrol and [had imports worth] $7.5bn and were not exporting at all. We have to go to Saudi Arabia and UAE and ask them to deal with the IMF (International Monetary Fund).
“We were selling petrol cheaper than the UAE. We were selling it cheaper than the country from which we buy refined oil,” he added.
He acknowledged that mistakes would be made and exporters might face problems in importing the material they needed to manufacture products.
Miftah Ismail said when he had been advised to remove the fixed tax on traders using less than 300 units of electricity, he had responded, “What can I do then but close the ministry? It amounts to removing tax on 96pc of shopkeepers. Why bother the other 4pc? We should just go home.”
This is not a government versus business thing, the minister said, adding that curtailing imports was a necessity.
“Give me three months. We are all in this together. Let me save this country from problems. Pakistanis will start importing again.”