CPEC crucial for Pakistan’s development, says Hafeez

Updated 26 Nov 2019

Email

Finance Adviser Abdul Hafeez Shaikh addressing the inaugural session of Pakistan Innovative Finance Forum on Monday.
Finance Adviser Abdul Hafeez Shaikh addressing the inaugural session of Pakistan Innovative Finance Forum on Monday.

ISLAMABAD: Defending the China-Pakistan Economic Corridor (CPEC), Finance Adviser Dr Abdul Hafeez Shaikh on Monday called for global awareness campaign about the multi-billion dollar programme for its real success.

He was talking to journalists after attending a seminar when asked to comment on recent statements from US Assistant Secretary Alice Wells warning Pakistan about the deepening debt problems due to CPEC.

He said the CPEC was a very important programme that involves a number of projects for the development of Pakistan like improvement in road network, modernisation of railway infrastructure, setting up of special economic zones (SEZs) to provide modern infrastructure to attract foreign investment.

He said the government and the well-informed people should try to create awareness about the benefits of the CPEC to the world because the real success of the programme would be possible only after the investors from other countries come and participate and benefit from a investment platform jointly created by China and Pakistan.

Calls for global awareness to attract foreign investment in key projects

He declined to comment when asked if Pakistan was ready to take US pressure. He said the government was also offering a special package of incentives for investments in the SEZs including tax holidays and other facilities.

Earlier, speaking at the inaugural session of ‘Pakistan Innovative Finance Forum’ organised by the Asian Development Bank, Dr Shaikh said the government had restored macroeconomic stability and a current account and primary balance surplus for the first time in many years.

He said the booming stock market, stable exchange rate and a renewed interest from international community in Pakistani market were clear signs of the recovery the economy had staged in recent months.

He recounted tough decisions and a series of steps including partnership with international bilateral and multilateral institutions, cutting down government expenditure, restoring fiscal discipline, incentivising exporters and narrowing the historically high current account deficit, leading to visible macroeconomic stability.

“We have a renewed interest from international community in the Pakistan market and in the last four months, investment in the Pakistani bonds from outside investors touched $1bn while foreign direct investment in the same period had increased by over 200pc when compared to the corresponding period last year,” he added.

He said he was not trying to paint a rosy picture as there were still challenges to tackle particularly in terms of bringing down prices and coming up to people’s expectations for generating more jobs and achieving high growth rate. “But the good news is that the growth rate agreed with the IMF is going to be surpassed by a vast margin,” he said, adding the IMF review of the first quarter showed all the agreed targets to have been surpassed with comfortable margins.

The adviser said that the government was committed to fiscal discipline, the role of private sector, transparency in governance, tracking down on corruption, reaching out to international community both the multilateral agencies as well as international and domestic private sector. “We have now created a platform on which to build and correct some of the deficiencies of our past and transform our economy,” he said.

He underscored the building and strengthening of institutions as a priority area for the government and the institutional autonomy granted to institutions such as the State Bank of Pakistan and FBR in their day-to-day decision-making.

Former SBP governor Dr Shamshad Akhtar said infrastructure sector development projects had been ignored by various governments and resultantly economic growth could not improve. She said Pakistan will have to focus on infrastructure development for higher growth trajectory. She said the ADB estimated at least 8 per cent of GDP spending for the next 10 years on infrastructure development in Pakistan.

Published in Dawn, November 26th, 2019