KARACHI, Dec 9: The government is not taking any dictates from the International Monetary Fund (IMF), and the rupee exchange rate parity is determined by the market forces.
Secretary General Ministry of Finance Nawid Ahsan stated this while answering the queries of the participants at a day-long seminar on “Capacity Building and Development of SMEs”, organised by Small and Medium Enterprises Alliance (SAMEA) at a local hotel on Saturday.
“Pakistan has stopped taking any assistance from the lending agency after graduating from its programme in December 2004,” he said and pointed out that things had now totally changed while referring to reports that the fund was seeking revaluation of the rupee.
The secretary said that the government would soon make downward adjustment in oil prices and would also introduce some policy changes in the textile vision to check fall in textiles export.
Defending the government for not passing on the benefit of falling world oil which had come down from record $78 to below $60, he said that the government had a liability of over Rs32 billion payable to oil marketing companies in price differential claims. However, he was quick to say that around Rs15 billion had already been paid, and hoped the local POL prices would be adjusted downward soon.
Answering another question about high markup, the secretary said that interest rate was also determined by market forces and added that the State Bank governor had recently asked the banks to reduce the banking spread by enhancing rate of return on deposits to encourage savings.
He disclosed that two day back the prime minister chaired a meeting to review the “Textile Vision 2005” to find out what had not been done to check the declining trend in exports. “Recommendations have been prepared and now only approval is on its way which may take a couple of days,” he added.
He agreed with Mian Zahid Hussain that smuggling will have to be checked if the government wants to see any growth in SME sector.
However, Mr Nawid said that an anti-smuggling wing was already working in the CBR and the situation was now improving. He also suggested that different task forces or committees should be set up comprising stakeholders in order to get better results.
Small and Medium Enterprise Development Authority (Smeda) acting chairman Syed Iqbal A Kidwai said that the definition for SMEs had been evolved with consensus and hopefully it would help to finalise SME policy soon.
SAMEA President Zafar Iqbal highlighted some of the issues confronting the SMEs and also suggested solutions to overcome them. He stressed upon the need for fast development of SME sector as it was the only way to reduce poverty and create employment.
