ISLAMABAD: The advisor to the Prime Minister of Finance and Revenue, Dr. Abdul Hafeez Shaikh, has expressed the wish that the accountability process will progress in such a way that it does not adversely affect the business climate, since the country is going from an economic crisis of stability due to "difficult decisions" made by the government.
Speaking at a press conference on Sunday, the adviser hinted at the incorporation of two profitable financial institutions, the National Bank of Pakistan (NBP) and the State Corporation of Life Insurance (SLIC), to the list of accelerated privatizations to improve their productivity and potential
The adviser also said that there was an inter-agency agency to ensure the effective implementation of decisions against money laundering to help the country get off the gray list of the Financial Action Task Force (FATF).
He acknowledged that stability and certainty had not yet reached a level that would trigger foreign and national investment, since "people normally expect a certain level of certainty to make great decisions." But the government was taking steps in that direction with the result that the cost of doing business had been reduced, the level of corruption declined and the exchange rate, the stock market and foreign exchange reserves stabilized, he added.
The prime minister's assistant says NBP, state life insurance may be under control; ongoing efforts to exit the FATF gray list
In response to questions about the harassment of executives and bureaucrats by anti-corruption agencies, Shaikh said business was more important than the government, because the former generated job opportunities and economic activities that the government supported through its policies. "I want the accountability agencies to do their job in a way that does not adversely affect the business climate," he said.
For his part, he said, the key objective of the government was to improve conditions for investors and entrepreneurs and, therefore, was taking a series of measures towards the Ease of Doing Business, while offering exporters an electricity subsidy, gas and facilities to take bank loans. He claimed that the country had emerged from the crisis inherited by the current government and was gradually resorting to stability. "It is not possible to suddenly reach the goal so quickly after the crisis," he added.
Inflation, taxes
Shaikh said inflation was a major challenge, although its prevailing rate was "lower than expectations." He said that the main priority of the government was to reduce inflation through various measures, including the freezing of central bank loans, the reduction or absence of tariffs on imports of raw materials, the transfer of the benefit of international oil prices to consumers and the prohibition of export of key products
He stated that the government was taking all measures in the interest of people and facing all pressure groups and vested interests that hinder the documentation campaign that increased the number of taxpayers from 1.9 million to 2.5 million. “We will provide all the facilities to the companies, but there will be no commitment regarding the payment of taxes. People should now be confident that the results of the difficult decisions taken by the government have begun to accumulate, "he reiterated, explaining that international actors such as the International Monetary Fund, the World Bank, the Asian Development Bank and others came to aid. of the Government.
"10 new companies on privatization list"
Dr. Shaikh said the government had reactivated Sarmaya Pakistan Company for the accelerated restructuring of 20 public sector entities with losses and placed 10 new companies on the privatization list and issued its announcements for the accelerated sales process. He said that companies in the electricity sector, particularly distribution companies (Discos), were preparing for privatization. In addition, large entities with good performance such as NBP and SLIC that could not improve further on their own would also be considered for a quick transfer to the private sector to reach their true potential.
When reminded that Pakistan Tehreek-i-Insaf had opposed the privatization of state-owned enterprises and supported the turmoil when the previous government had planned to discharge them and why he expected the current opposition to act otherwise, Dr. Shaikh said : "Every opposition had the right to oppose good things."
But he said there should be no problem when transactions are carried out transparently and efficiently while protecting workers' rights. He said as a former privatization minister that he had completed a record of 34 privatization transactions with more than $ 5 billion in profits and that most of those companies were in front of everyone to see their performance.
He said the government expected around Rs1 billion in non-tax revenues this year through Rs200bn flows from cell companies, Rs400bn from Pakistan State Bank's earnings provided exchange rates remained favorable and Rs300bn from the revenues of the sale of two power plants based on RLNG.
He said this would help reduce loans and provide funds for public welfare. Simultaneously, he added, the government maintained strict control over expenditures and had not approved any complementary subsidies during the current fiscal year. This meant that the deficit of Rs2070bn due to the devaluation of the currency last year was reversed and the recent improvements in the exchange rate resulted in a profit of Rs246bn in two months, while the debt stock had increased only Rs24bn, he added.
Shaikh said that the objective of the 2.4pc growth rate for the current year was expected to be easily exceeded, as the corrective measures introduced by the government had begun to produce results, particularly in the agricultural sector. The agricultural sector, which had shown a 0.1{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} decrease in the last five years, had begun to improve by showing growth of more than 3{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} at the end of the financial year, he added.
Responding to the question, the adviser said the government expected to deliver 0.6pc of primary balance committed to the IMF through higher non-tax revenues, cost control, economic activities and macroeconomic stability. He said that some quarters had misinterpreted a scheduled visit by an IMF director to Pakistan that it was "a purely routine matter" and that it had nothing to do with the review of the program quarterly.
Posted on Dawn, September 16, 2019
Source: https://www.dawn.com/news/1505468/accountability-should-not-affect-business-hafeez