Friday September 29, 2023

Financial emergency ruled out

Creation, spread of 'false messages' against national interest, says finance ministry

By Mehtab Haider & News Desk
December 07, 2022
Finance minister Ishaq Dar. — AFP
Finance minister Ishaq Dar. — AFP

ISLAMABAD: The finance ministry has ruled out the possibility of declaring financial emergency in the country and said that the creation and spread of such false messages are against the national interest in these times of economic hardship.

A mere reading of the nine points mentioned in the message indicates how far-fetched those suggestions are.

“It is also quite inappropriate to equate Pakistan with Sri Lanka, given the inherent strength and diversity of the country’s economy,” the ministry said in a statement issued Tuesday night.

It states that a false message about supposed economic emergency proposals has recently been circulating on social media.

The Finance Division not only strongly refutes the assertions made in the said message but also categorically denies them and that there is no plan to impose an economic emergency.

The message is unfortunately aimed at creating uncertainty about the economic situation in the country and can only be spread by those who do not want to see Pakistan prosper. The present difficult economic situation is mainly the result of exogenous factors like the commodity supercycle, the Russia-Ukraine war, the global recession, trade headwinds, the Fed’s increase in policy rates, and the devastation wreaked by unprecedented floods.

The government has been making its utmost efforts to minimise the impact of such external factors, even when faced with the economic consequences of unprecedented floods and having to meet IMF conditionalities. The government remains committed to completing the IMF programme while meeting all external debt repayments on time.

In this challenging economic situation, the government has put in place several austerity measures with the approval of the federal cabinet. Such actions are public knowledge and are aimed at eliminating non-essential expenditures. Similarly, the government has been debating energy conservation, mainly to reduce the import bill. Such deliberations will continue in the cabinet, and all decisions will be taken in consultation with all stakeholders and the best national interest. With the current government’s efforts, the IMF programme has come back on track, and negotiations leading to the Ninth Review are now at an advanced stage. The government’s recent efforts have resulted, among others, in lower current account deficits in recent months and the achievement of FBR revenue targets. Shortly, pressure on the external account will be relieved. While there is still a need for structural adjustments in the medium term, the country’s economic situation is improving.

The Finance Division urged the people of Pakistan to contribute towards economic betterment and stability and not to pay heed to malicious rumour mongering, which is against the national interest of Pakistan.

Meanwhile, ambassadors from China, the United States and United Kingdom have assured Finance Minister Ishaq Dar of their full support to Pakistan in the rehabilitation of flood-hit areas as Islamabad is trying to shore up support of the international community to provide relief to the calamity-stricken people, Geo reported. The ambassadors held separate meetings on Tuesday with the finance minister, where matters related to bilateral relations, the economy and the government’s works in the flood-hit areas came under discussion, according to the Finance Division.

In his meeting with outgoing British High Commissioner Dr Christian Turner along with United Nations Development Programme (UNDP) Consultant Michael Barber, Dar apprised them of the ongoing post-flood reconstruction and rehabilitation programmes. Dar revealed that the overall reconstruction and rehabilitation phase is going to take five-seven fiscal years. Senator Dar apprised the officials about the overall economic outlook of the country and also shared that Pakistan is meeting its external financial obligations and has recently repaid a $1 billion bond.

While giving a briefing about the policies and measures being undertaken by the government for safeguarding the vulnerable segments of society, Dar mentioned that the Centre has a “comprehensive and pragmatic” programme in terms of revenues and expenditures for meeting its national as well as international financial obligations. Turner, whose tenure as the high commissioner will end next month, commended the practical measures being undertaken by the government and offered all possible help from the British government for the people of Pakistan in mitigating the socio-economic impacts of the post-flood crisis.

Meanwhile, in his meeting with Ambassador of China to Pakistan Nong Rong, Dar highlighted the long-standing and deep-rooted relations between both countries. “It was shared that China and Pakistan have strong bilateral ties in a number of economic avenues,” the statement from the Finance Division read.Both leaders discussed further deepening of these ties in the economic as well as financial sectors.

The finance minister also expressed grief on the sad demise of former Chinese President Jiang Zemin and said that it was a great loss for China as well as Pakistan as the deceased was a great friend to Islamabad. Senator Dar told the ambassador about the ongoing reconstruction and rehabilitation programme being undertaken by the incumbent government after the deadly floods. The finance minister commended the support of the Chinese government in these hard times and shared that the government was taking various measures to protect the vulnerable segment of society.

He also said that the Government of Pakistan has a “realistic plan” for dealing with any upcoming expenditures regarding reconstruction and rehabilitation programmes in the flood-affected areas.

The finance minister further apprised the Chinese ambassador that the government remains committed to completing the International Monetary Fund (IMF) programme while meeting all external debt repayments on time. The Chinese ambassador appreciated the policy initiatives being taken by the government for sustaining and boosting fiscal and monetary stability. He shared goodwill gestures and assured of continuous support of the Chinese government to Pakistan and added that Beijing stands with the people of Pakistan and is willing to provide every possible assistance.

The finance minister, while meeting Ambassador of the United States Donald Blome highlighted the historic and durable bilateral relations with the US on the economic and trade front. Special Assistant to Prime Minister on Finance Tariq Bajwa, Secretary Finance Hamed Yaqoob Sheikh and other senior officers from the Finance Division participated in the meeting, according to a statement. The finance minister apprised the US ambassador about the ongoing post-flood reconstruction and rehabilitation projects being undertaken by the government. “It was also shared that the government is highly concerned about the well-being of the masses and, therefore, a number of measures are being undertaken in this regard.”

Both sides, according to the statement, shared other matters of common interest as well during the meeting. The finance minister apprised the US ambassador about the government’s comprehensive and pragmatic plans in terms of revenues and expenditures for meeting its national as well as international financial obligations.

US Ambassador Blome reciprocated the same sentiments on bilateral relations between the United States and Pakistan. He acknowledged the huge level of economic losses being faced by Pakistan due to the flood crisis and shared that the US government stands with Pakistan in such testing times. The finance minister commended the support of the US and said that Washington has always been a great support to Pakistan during tough times. Senator Dar emphasised the various economic avenues in which both countries can further deepen their economic relations.

On the other hand, Minister of State for Petroleum Musadik Malik said on Tuesday that the coalition government was moving ahead with its plans to strike a much-anticipated deal for Russian crude oil at a discounted rate and a high-level delegation from Moscow will arrive in Islamabad on January 20, according to Geo News.

A day earlier, the minister said Russia had agreed to provide crude oil as well as gasoline and diesel to Pakistan at discounted rates.

In a statement, Malik claimed that the US would not impose sanctions on Pakistan for the proposed deal. “Our visit to Russia turned out to be more productive than expected.”

Brushing aside the claims of former prime minister Imran Khan about his alleged talks with Russia on oil imports, Malik took credit for the proposed deal and said that the minutes of their meetings with Moscow officials could prove their claims.

In response to a question about the country’s financial crisis, the minister stated that the government is not considering declaring an economic emergency. He maintained that the government recently paid $1 billion for Sukuk bonds. He maintained that the country would not default.

Malik said Russia did not have liquefied natural gas (LNG). “Talks with Russia’s private firms are underway for the import of LNG, while we have also engaged Russia’s state LNG producers,” Malik said.

According to the state minister, significant progress has been made in talks over the pipeline projects with Moscow.

Speaking to journalists, Malik said the country required 1% additional energy to meet the demand.

In response to a question, he said the government would ensure an uninterrupted gas supply to households during cooking hours.

“More gas is being supplied to the domestic sector in December 2022 compared to the last year,” the minister said.