US vows support to economic reforms, business development

ISLAMABAD: The United States on Tuesday vowed support to economic reforms taken to correct Pakistan's external and internal account balances and strengthening of bilateral trade relationship.

“The US will continue to remain engaged with Pakistan in its economic reforms efforts and help build an environment that facilitates business development between the two countries,” Alice Wells, acting assistant secretary of State for South and Central Asian Affairs said.

Ambassador Wells was talking to Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh at a meeting. The diplomat was leading a US delegation, along with the US treasury officials, an official statement said.

The government has adopted an economic reforms program under a $6 billion loan deal with the International Monetary Fund (IMF) reached last month. The three-year extended fund facility program aims to help the country overcome external account challenges and improve revenue mobilisation through increasing tax to GDP ratio, which is one of the lowest in the region.

The adviser briefed the visiting delegation on measures pertaining to economic reforms being undertaken by the government to ensure economic discipline, efforts being made towards implementation of the Financial Action Taskforce (FATF) action plan and the key challenges.

Shaikh emphasised the importance of bilateral engagement with the US and the need to encourage entrepreneurs from private sector of both the countries, which will lead to enhanced trade.

The adviser said the government has taken significant steps over the past three months to bring financial discipline that include reduction in current account deficit, focus on increasing revenue generation, measures to reduce fiscal expenditures and fiscal borrowings, efforts to enhance foreign exchange reserves through bilateral and multilateral support, arrangement of petroleum credit facility with Saudi Arab, and Islamic Development Bank and IMF program. “Further, as part of institutional development initiative, SBP and FBR are being resourced and empowered,” he added. “At the same time to support economic growth and facilitate the people below the poverty line, various programs to support our export-oriented industries and health insurance schemes have been introduced for the poor.” On implementation of FATF action plan, the adviser said the government is putting in all-out efforts to complete the action plan, involving all relevant authorities at the federal and provincial levels, supported by capacity building through international partners.

Shaikh expressed the government’s commitment to enhance the effectiveness of its anti-money laundering law/combating the financing of terrorism (AML/CFT) framework being undertaken by the government, with the objective to ensure that all the actions that are being taken to curb terror financing are irreversible and sustainable. The adviser urged for continued support of the international community for strengthening of the AML/CFT framework over a longer period of time. Meanwhile, the finance adviser said the relationship with the United States is on a more stable footing than the previous tenures.

“The government is making all possible efforts to come out of the grey list of the FATF,” he said during a meeting with Ambassador of Japan to Pakistan Kuninori Matsuda. “The US authorities have acknowledged the hard work and seriousness of the Pakistani government on controlling terror financing and money laundering.”

The finance adviser expressed his desire to expand the trade relations existing between the two countries on mutually beneficial and supportive terms. The adviser said that he would continue to support the further strengthening of the relationship. Matsuda said the Japanese investors are planning to invest in pharmaceutical and food and agriculture sectors. Japanese government is planning to invite Pakistani business delegations to Japan to explore the possibilities of finding new trade ventures, he added.

The diplomat told Shaikh that currently the government of Japan and Japan International Cooperation Agency (Jica) are cooperating with the government of Pakistan on social development programs, technical assistance in counterterrorism activities and health and hygiene sector.

“Jica is also planning the next level of economic partnership with the government of Pakistan,” he said. “Pakistan could prove an important gateway for expanding the regional trade between Japan and Central Asian States.”