Panama, Bahamas leaks or whatever, truth should come on surface: IMF

ISLAMABAD: The visiting Managing Director of the International Monetary Fund (IMF), Christine Lagarde, said on Tuesday that combination of transparency and accountability can defeat corruption because such menace could hamper economic development and foreign direct investments (FDI).

The IMF MD extended deep condolences on the Quetta terrorist attack, saying it reminded her of the last November attack in Paris when she was visiting there. She also praised the country for coming out of the IMF programme and attributed this success to ownership demonstrated by the political leadership towards undertaking tough economic reforms agenda.

“The perception or real corruption can hurt the economic development by hampering the FDI and it bothers if there is a perception that anything can be bought. Whether it’s related to Panama or Bahamas leaks or whatever, truth should come on surface as transparency and accountability could defeat corruption,” Lagarde said in a joint press briefing along with Pakistan’s Minister for Finance Ishaq Dar here.

Whether it’s Panama or Bahamas, these issues need to be addressed, she said, and added that it could be settled by putting them on the table. “The best way is to use technology because it is becoming more difficult to hide. It requires honesty,” she said.

The IMF MD said that she would emphasise upon the need for placing more resilience into the economy in order to absorb future shocks for Pakistan’s economy. “I will recommend more resilience, more sustainable and more inclusive growth for Pakistan,” she added.

Ishaq Dar said that Pakistan would be signing the anti-bribery convention of OECD forum as Islamabad had recently signed the OECD’s global forum on tax evasion. “We have triggered the process and it is not yet known how long this process will take to get the final shape,” he added. Dar said the government was committed to eliminating corruption.

To a query regarding the PTI’s announcement to lockdown the federal capital, the minister said that no one was above the law and there was no justification for more sit-ins in the federal capital. He said that the earlier sit-in had caused heavy losses to the national economy.

The amendment in the Inquiry Commission Bill, he said, was tabled in the National Assembly in a bid to strengthen the inquiry commission as recommended by the Supreme Court of Pakistan, adding that the apex court could have declared it as toothless on the basis of which different inquiry commissions ranging from the Fall of Dhaka to Osama bin Laden had undertaken its assigned task, so the amendment bill was introduced with the intention to give future inquiry commissions all kinds of required powers to undertake the assigned tasks.

When a journalist asked about the imposition of four percent of GDP taxes equivalent to Rs1,200 billion into national kitty to meet the rising public debt as mentioned by the visiting MD, she said that there were not many options but there was a need to focus more on higher growth that could generate job opportunities and reduce poverty.

Pakistan’s revenue potential, she said, needs to be materialised fully as other comparable countries among the developing countries were generating more tax revenues. “There is no magic reply,” she said, and added that inclusive growth and investment friendly policies could provide more solutions.

However, Ishaq Dar said the revenue generation of Rs1,200 billion or four percent of the GDP was a combination of different factors as one percent of GDP related revenue was raised through abolishing exemptions, concessions, one percent through improved tax administration and the remaining two percent was fetched through imposition of new taxes.

Later, he further explained that out of Rs1,200 billion additional revenue, the Centre transferred Rs700 billion to the provinces under the Federal Divisible Pool (FDP) in accordance with the latest NFC formula while the remaining Rs500 billion were utilised to scale up development and social safety netprogramme.

To another query about the authenticity of official figures, Dar said that he would challenge all those who made such biased statements. He further said that the PBS was granted autonomy with parliament’s nod.

When asked about any fresh request from Pakistan for a fresh lending programme, the IMF MD said Pakistan had made no such request but reiterated that the Fund would be ready to provide technical assistance to the country.

Regarding the declining exports, she said that Pakistan’s exports were four times lower in comparison to other emerging markets but Pakistan can take several other steps, including promoting regional trade with its neighbours irrespective of geo-political considerations.