Pakistan unlikely to be placed on FATF blacklist: Miftah

LAHORE: Former finance minister Miftah Ismail believed that it was unlikely Pakistan would be placed on the blacklist of Financial Action Task Force (FATF) despite US and India’s plot to blacklist the country.

“The money laundering in a single season during Indian Premier League alone was more than the total volume of money laundering in Pakistan,” he said while speaking along with former finance ministers Dr Salman Shah and Hafeez Pasha during a talk on “Growth, IMF and Pakistan’s Economy” on the final day of a two-day ThinkFest Conference held under the aegis of Information Technology University (ITU) Centre for Governance and Policy’s Afkar-e-Taza here at Alhamra Art Centre on Sunday.

He said that Pakistan had won through vote in FATF but US, on the insistence of India, acted to redo the exercise. “Although Pakistan remained on FATF blacklist in 2008-09 but now it won’t occur again,” he said while also complimenting the present government for taking the right steps to stop money laundering out of the country.

Miftah Ismail said that federal government was running in deficit as it was left with only Rs1,400 billion out of total revenue of Rs5,700 billion after distribution to provinces, Gilgit-Baltistan and Azad Jammu & Kashmir under divisible pool as well as debt servicing. “Inevitably, it has to bank on loans,” he said, adding that until and unless Pakistan recovers from budget deficit, the import deficit is not likely to come down. He said that the import substitution was never a solution; therefore, the only way to get out of economic crisis was to increase the exports. He said that Pakistan’s exports stood at 2 per cent of the global export volume in 1960s, which has now been reduced to 0.1 per cent. In 1992, he said, Pakistan and Vietnam’s export volume used to be almost equal but now latter has crossed over $180 billion.

When I was Finance Minister, he said, I wrote to chief secretaries to eliminate some taxes out of total 50 taxes that caused increase in cost of doing business.

Dr Salman Shah and Dr Hafeez Pasha differed on the volume of defence budget as former believed it to be around 13 per cent while later counted defence budget around 20 per cent that further rose up to 26 to 30 per cent due to additional security expenditures by the provinces.

Dr Salman Shah said that Pakistan had a huge pool of 100 million youth for the next 30 years, which needs to be engaged after proper training to utilise their potential for maximum output in the interest of country’s economy. “Currently, only 1 per cent of the total 70,000 manufacturing units have over 250 workers,” he said, adding that the policies were not allowing small manufacturing units to grow, and at the same time, we want to keep big manufacturing units under control.

Despite huge potential in agriculture, he said that Pakistan had either been not utilising it or wasting it. He said that Pakistan was using only 50 million acre out of total 70 million acre land available for agriculture. “Similarly Pakistan is using 200MAF water, including 150MAF river flow and 50MAF underground water through tube-well,” he said, adding China was getting a $400 billion output against Pakistan’s output $60 billion output with the same water. “Our intellectuals and scientists have also failed Pakistan,” he said, adding that the universities with over 100 years of history had failed to offer any new technology or research to advance the agriculture or economy of the country.

Dr Hafeez Pasha said that Pakistan ranked 150 in UN Human Development Report with lowest human development index in South Asia. He said the provinces were lacking in capacity to utilise their share in divisible pool under 7th NFC Award, which also hampered human development in the country.

He said that Pakistan must invest in welfare of its people through education, health and population planning.

He said that Free Trade Agreement (FTA) with China was a biggest barrier in import substitution as it increased import of cheap goods from China that badly affected local industry. “We must exchange imports with exports to China instead of Sukuk bonds or other currencies. We should import efficient agriculture technology as China had excelled in agriculture through drip irrigation. He also mentioned that Pakistan registered 5 per cent growth rate during Ayub Khan’s regime on the basis of green revolution.