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• Former, incumbent finance ministers attend SECP event
• Dar dismisses concerns over heavy debt, highlights country’s potential
• Aurangzeb says IMF board expected to approve $7bn deal by month’s end
ISLAMABAD: In their first public event together after coming to power almost five months ago, former and incumbent finance ministers — Ishaq Dar and Muhammad Aurangzeb — on Thursday were unanimous about the need for structural reforms to pull the country out of economic challenges and take course to sustainable development.
Both the financial wizards — a chartered accountant and a banker — were also undivided over further easing in the central bank’s monetary policy.
Prime Minister Shehbaz Sharif, after he assumed leadership of the coalition government for the second time, appointed Muhammad Aurangzeb to replace Ishaq Dar, the PML-N’s lifetime economic czar and five-time finance minister.
Though Mr Dar and Mr Aurangzeb have participated in official meetings since joining the federal cabinet on March 11, it was rare for them to attend a public event together. The occasion was a ceremony organised by the Securities and Exchange Commission of Pakistan (SECP) to lay the foundation stone for its 28-storey head office building.
Deputy Prime Minister Dar, who also serves as the foreign minister, laid the foundation stone for the new SECP building, a project he helped initiate by allocating a public plot in 2017.
He took this opportunity to boast about “Pakistan’s economic war” he fought for 15 months during the previous tenure of PM Shehbaz “with the only agenda to avoid sovereign default at any cost”.
Dismissing concerns over Pakistan’s heavy debt, Mr Dar said, “Don’t scare us of $120 billion debt. Pakistan has over $10 trillion worth of mineral resources” and immense economic potential.
He said the government’s corrective measures resulted in economic stabilisation. “We are taking steps for improving trade and exports and we will control deficit through reforms in taxation and the power sector,” he said, adding that the government was taking critical reforms for economic stability. He assured that the policy rate would soon improve, anticipating a swift economic recovery.
Finance Minister Aurangzeb said the IMF’s executive board was expected to approve Pakistan’s $7bn bailout programme by the end of the current month.
He cited recent positive reports from Fitch Ratings and the State Bank of Pakistan, which indicated macroeconomic stability.
“We have to now move forward, increase tax collection for which everyone has to pay tax,” he said, adding that the hard-earned macroeconomic stability would now be turned into sustainability.
However, Mr Aurangzeb warned that reforms would have to be pushed if the 24th IMF programme is to be made the last one. He said foreign direct investment and export growth were among the government’s critical objectives and reforms would be sustained under the IMF bailout package. State-owned entities would be privatised and exports would have to be increased, he said.
At present, he said, the banking sector primarily lends to the government, but efforts are underway to encourage financing for the private sector. He asked the SECP to take steps to develop and deepen capital markets.
Mr Dar said the establishment of SECP’s independent building was an important step towards its financial autonomy and urged the corporate sector regulator to continue playing its role in developing the country’s economy. He pledged the government’s full support in introducing key reforms to SECP’s regulatory framework.
SECP Chairman Akif Saeed said the commission was introducing radical reforms in the regulatory frameworks to facilitate ease of doing business and investment processes.
Published in Dawn, August 2nd, 2024
