Pakistan’s Finance Minister Hafeez Shaikh says Pakistan is expected to cap this year with nearly 4% in growth, while the country has to pay $1.4 billion in loan repayments.
His speech at the Brookings Institution, however, was mostly about the current administration’s shortcomings when it came to sound economic policies.
The finance minister talked about the government’s failure to implement Value Added Tax, energy sector problems and the challenges faced following the floods of 2010.
Shaikh said that Pakistan budgeted for the loan repayments, most of which have been disbursed. He said that Pakistan was expected to grow by 4% this year. However, when asked about the IMF projection of 3.4% growth, Shaikh said the country has revised those figures since an increase in growth was registered in the agriculture and manufacturing sector. Shaikh said the economic managers believe growth would be above 3.8%.
He said that while he would not want to comment on the figures of the Coalition Support Funds, the administration is talking to the US on the issue and believes it would be resolved soon. The US halted disbursement of Coalition Support Funds last year as bilateral relations went into freefall after the Raymond Davis incident and the Abbottabad raid. Shaikh, who is in town leading a four-member team to attend the IMF/World Bank Spring Meetings 2012, said that the government was trying to improve the energy sector. It is a historical failure of Pakistan that the country has a small tax base, he added. Shaikh said that the United States had been providing assistance – the country helped them gain market access to the EU and played a role in the transit trade agreement with Afghanistan.
Published in The Express Tribune, April 19th, 2012.