The $1.5b gift: ‘Friendly country’ does not have to be repaid, says Dar

Finance minister gives the lower house details about the grant, but without naming the donor.

ISLAMABAD:

Finance Minister Ishaq Dar said the $1.5 billion grant – which helped Islamabad shore up its foreign exchange reserves recently – was given to Pakistan by “a friendly country” as a gift that does not have to be repaid.

The monetary assistance contributed to a sharp recovery of the Pakistani rupee, which rose to a nine-month high of Rs97.40 from Rs105.40 against the dollar between March 4 and March 12 – its strongest rally in 30 years.

In a policy statement on the floor of the National Assembly on Wednesday, Dar said the amount was given to Pakistan with no strings attached.

He said the amount was transferred to the Pakistan Development Fund (PDF) and would be utilised for development projects. Referring to Prime Minister Nawaz Sharif’s statement on the issue, the finance minister reiterated that Pakistan will not send its troops to other countries.

Dar, who took the floor twice to explain the Saudi financial assistance, looked a bit uneasy after lawmakers of Pakistan Peoples Party (PPP), Pakistan Tehreek-e-Insaf (PTI) and Muttahida Qaumi Movement (MQM) cast doubts over the Saudi aid.

PPP’s Syed Naveed Qamar, taking the floor, expressed his reservations over speculations that Pakistan is taking a partisan approach over Syria. He warned that any such shift would be disastrous for the country.

About the Saudi aid, Qamar said there are no conditions in written form, pointing out that a clear tilt is being witnessed towards Saudi Arabia, which is not a good sign for a multi-sect country like Pakistan.

PTI’s Shah Mehmood Qureshi said that after Finance Minister Ishaq Dar explained the reasons behind this ‘gift’ in financial terms, the prime minister and the defence minister ought to make a categorical statement on the political side of this aid.

MQM’s Dr Farooq Sattar said any country doling out money without conditions is beyond comprehension. “There is no free lunch in the world,” he noted. He believed that foreign countries are fighting their proxy wars in the country and we have done nothing to stop it.

“What will our friendly country think when it sees this negativity in response to its generosity,” Dar retorted.

Giving details of the financial aid from the ‘friendly country’ – Dar never once mentioned Saudi Arabia – the finance minister said the first tranche of $750 million was received on February 19 while the second tranche was transferred on March 7. “No further amount is in the pipeline yet. However, if it comes, it would be welcomed,” he told the house.

This transaction took place from one Central Bank to the other and was submitted in the PDF.

Expressing satisfaction over the country’s economic performance during the last eight months, Ishaq Dar said that tax collection, home remittances and exports have increased. He said the positive economic indicators have also restored the confidence of international financial institutions. These institutions are now declaring Pakistan an attractive place for investment.

The finance minister announced that the government has decided to float Eurobonds in the international market in the first week of next month keeping in view the confidence expressed by the foreign investors.

No pay rise

Ishaq Dar also announced that there would be no increase in the pensions and salaries of state employees in the upcoming fiscal budget 2014-15. For the first time in years, the salaries of government employees will see no change.

He also informed lawmakers that they will be provided with more development funds in the new budget.

Published in The Express Tribune, March 27^th, 2014.