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Economic direction by end September, says Umar

August 22, 2018

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Asad Umar
Asad Umar

KARACHI: The new PTI government will have its economic direction by end September, says Finance Minister Asad Umar in a talk with Dawn on Tuesday.

"By then we would have made up our minds which way we should be going," he said.

The cabinet's decision to ramp up the pursuit of money earned from corruption and stashed abroad is not central to the party's plans for macroeconomic stabilisation, he underscored.

Finance minister promises debate in parliament to decide future course of action for the economy

"Of course, whatever sums are recovered from this will help but we are not banking on this money for stabilising the economy." The main purpose of the policy is to provide a "disincentive" to those who seek to earn money from corrupt practices and launder it abroad, he said.

The economy is heading towards massive imbalances, he added. "With due respect the budget announced by the last government is not worth the paper it is written on" he said, adding it will result in a fiscal deficit of seven per cent if the government proceeds under it.

When asked if the question of growing macroeconomic imbalances was discussed in the first cabinet meeting, he said no but it has been discussed with the prime minister.

"He mentioned it in his speech, and this is clearly the central crisis that needs to be dealt with."

He says the "ball is in my court" with developing a future course of action in dealing with the growing economic imbalances. "The swearing in took place only half an hour before the cabinet meeting, what could I have possibly taken to them at that time?" he asks. It will take time to take detailed stock of the situation, he says - something he is working on.

"Right after the cabinet meeting, I went to the finance ministry where we reviewed the situation" he says, when asked for details on what he is working on. The next morning at 9:30, a more detailed assessment of the numbers was taken and "we were able to get into the nuts and bolts of it, play with the financial variables."

Before finalising any decision by end of September, he says he wants to go to parliament first. "I want to go to parliament, I want a debate to take place" on whatever direction we adopt for the economy.

The "reality" has to be presented to parliament first he says, referring specifically to the numbers in the budget that he says will need redrawn.

"We will invite all parliamentarians to participate in the debate because we believe such decisions should be taken by consensus" he says. That will be the moment for them to "come up with their own ideas about what best to do."

Before and after any such parliamentary decision, a cabinet meeting will be essential.

"So realistically, it will be end September by the time we reach a point where we have our future direction mapped out."

Published in Dawn, August 22nd, 2018