Ambitious plans: Every dollar of CSF to be recovered, says Dar

Govt to issue $2.5b international bonds, economic growth rises to 5%.

ISLAMABAD:

Pakistan has vowed to recover every dollar of the Coalition Support Fund (CSF) from the United States and has said the $850 million outstanding amount is not a “charity but its right”, as the government targets the CSF and new $2.5 billion international bonds to shore up its reserves.

“Every dollar on account of the CSF will be taken from the US. It’s not a charity but is Pakistan’s money that it spent 14 months ago,” said Finance Minister Ishaq Dar here on Wednesday while addressing a press conference.

Dar’s comments came following reports that US Defence Secretary Chuck Hagel had threatened to stop CSF disbursements, if Nato supplies remained blocked.



At the press conference, Dar was sharing economic achievements of the first five months of his government. Despite all odds, the minister claimed an early victory on the economic front, saying in the first three months, economic growth had almost doubled to 5%.

He said there were challenges on the external front and the government had chalked out a plan to issue $2.5 billion worth of international bonds to shore up foreign currency reserves in addition to offloading shares of state-owned enterprises worth Rs200 billion in the stock market.

Dar said the government would recover $850 million of CSF, $800 million from Etisalat and get $1.2 to $2 billion in the auction of advanced telecom spectrum.

“I have taken up the issue of CSF with Chuck Hagel and he said Pakistan should fast track the process of submitting claims and the US will also ensure release of the amount on a fast-track basis,” Dar said.

He said Hagel had assured that $381 million would be released by mid-January while claims for $409 million had been sent to the US Embassy.

In addition to the outstanding claims, he said, another about $800 million had been spent from the budget in the current year and its claims would be filed soon.

GDP growth

Expressing satisfaction that the “economy has been put back on the right track”, Dar said during the July-September period the economy grew 5%. In the first quarter of the previous fiscal year, the growth was 2.9%. “Economic indicators were better than our expectations,” he said.

In the first quarter, the agriculture sector grew 2.5% against the target of 3.8%. But the push came from the industrial and services sectors, which outperformed due to clearance of circular debt and reduction in power outages.

The industrial sector grew 5.2% against the target of 4.5% and the services sector grew 5.7% against 4.5%.

Dar claimed that the figures were “authentic” and could be counterchecked. In five months, the government paid Rs101 billion in power subsidies.

Inflation

The minister admitted that inflation was increasing due to rise in power tariffs and levy of Rs200 billion new taxes in the budget.

“The caretaker government was responsible for these actions as they promised to the IMF to take both these steps and we just implemented them,” he claimed.

He said consumers of up to 200 units of electricity were exempted from the tariff increase. Prime Minister Nawaz Sharif ordered on Wednesday an inquiry to verify claims in a story published in The Express Tribune in which the issue of increase in tariffs for consuming less than 200 units had been highlighted, he said.

International bonds

Dar said in order to shore up depleting foreign currency reserves, the government had finalised a $500 million loan with the International Finance Corporation (IFC). Within two weeks, Pakistan will also give permission to the IFC to issue Global Rupee Bond worth $1 billion.

Pakistan Diaspora Bond worth $500 million will also be issued and the financial adviser will be appointed soon. For a $500 million Euro bond issue, the process is on track.

To resolve the dispute over $800 million outstanding payments, a team of Etisalat was coming to Pakistan in the third week of this month, he added.

Published in The Express Tribune, December 12^th, 2013.

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