No economic crisis, says Imran

Updated December 29, 2018

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Prime Minister Imran Khan claims situation is improving, promises foreign investment, export promotion and import substitution at the same time. — File photo
Prime Minister Imran Khan claims situation is improving, promises foreign investment, export promotion and import substitution at the same time. — File photo

ISLAMABAD: Prime Minister Imran Khan has said the country may be facing challenges, but there is no crisis in the country.

“All things are manageable. There is a lot of potential for improvement in this country. We inherited an economy with the highest-ever $19 billion current account deficit,” Mr Khan said in a brief interaction with journalists in the conference room of PM Secretariat just before he went into the concluding session of a two-day envoys’ conference held here.

Take a look: These 19 developments shaped Pakistan's economic future in 2018

“We have survived the last four months,” he said and pointed out that things were not good when he came to power, giving examples such as losses in the Utility Stores, PIA, railways, etc. “Wherever I was given a briefing in my early days, I was told about nothing but losses, but now I am seeing constant improvement,” he claimed.

Claims situation is improving, promises foreign investment, export promotion and import substitution at the same time

In response to a question about the difficult conditionalities being demanded by the International Monetary Fund (IMF) in the ongoing talks, the prime minister said that “we can see political factors this time” in the talks since the previous government had been dealt in a different way as evidenced by the many waivers granted during the implementation of the previous programme. “The agreement is delayed because of some conditionalities being demanded by the Fund that our government is not in a hurry to go for.”

However, he expressed the confidence that the IMF would come around to the conditions proposed by his government. “The IMF stance will change; they will come up with reasonable conditions because time is in our favour,” he said and pointed out that his government had managed to shore up reserves in the meantime, citing recent agreements with Saudi Arabia and China.

He said a memorandum of understanding (MoU) was signed with Saudi Arabia to attract large-scale investment in the oil and gas sector, without giving details.

“I am seeing interest by investors for making huge investments in Pakistan,” he continued, pointing to the country’s youthful population and geo-strategic position. “This is our strength and will help us in attracting investments.”

Mr Khan said labour in China had become expensive, forcing them to relocate industry outside their borders. He cited the examples of Vietnam where the Chinese factories are relocating.

“On the same pattern, we are expecting similar relocation of industries in the special economic zones of Pakistan. We have entered into a new arrangement with China which will help in transfer of technology to Pakistan”, whereas the earlier focus of Pakistan’s engagement with China was on road and energy projects, he said.

In the agriculture sector, the prime minister said, Pakistan had also signed an MoU with China. “Agriculture is the only sector where we can show immediate growth in terms of promoting exports” to China, he said, adding that the focus of the incumbent government was to promote agriculture in the country, with a focus on technology from China to enhance productivity of small farmers. “This will help in fighting poverty in rural areas of the country,” he said.

“We are coming up with other special measures to facilitate investments in the country. The focus of our policies is ease of doing business. We have set up a special desk in the Prime Minister Secretariat,” he told the reporters.

PM Khan also promised further “packages for exporters” and “an unusual scheme of how to create wealth in the country” and said his government would change the culture in Pakistan where investors would be given respect.

On the money laundering issue, the premier said that a comprehensive crackdown had been initiated, adding that the voices being raised from some quarters against it were the outcome of this crackdown. He said the measures suggested by the Financial Action Task Force (FATF) to tackle money laundering were in favour of Pakistan. “We are ready to implement all those measures. All the measures are in our support.”

Mr Khan said his government would soon launch a poverty alleviation programme. “The impact will be visible on poverty.” He said that poverty alleviation measures taken by the previous governments were not applied to the poor people or small consumers, claiming that the track record of his government in this area would be different. “At the end of four months, things have changed and stability will come now.”

Ties with neighbouring countries

The prime minister said he had improved the relationship with neighbouring countries. However, he said due to election-re­lated pressures, India was reluctant to accept his talks offer to build a better relationship.

After this brief interaction, the prime minister left the room to deliver his address at the concluding session of the envoys’ conference taking place in the same building and Finance Minister Asad Umar and Adviser to the PM on Commerce and Industry Abdul Razak Dawood were left in the room.

Mr Umar continued the discussion, pointing to the current account deficit that he said stood at around $2 billion per month. “The priority for us is to reduce this deficit. The reduction in deficit is our primary target and growth at the moment becomes secondary,” he added.

All the measures taken earlier were not related to the IMF, he said, referring to the money bill of September, interest rate hikes and exchange rate depreciation.

Published in Dawn, December 29th, 2018