Referring to a recent comment by the federal finance minister that Pakistan’s economy was “on the verge of collapse”, Mr Thomson said that the size of Pakistan’s deficit was “too big to be plugged” by international funding and that Pakistan should “not expect an international bailout” package. “The international community will help those who help themselves,” he pointed out.
In response to a question, Thomson said that the state of Pakistan’s economy was not the fault of the incumbent government, adding that economic fundamentals “have not been strong for a very long time”. He said that Pakistan needed to raise its tax-to-GDP ratio from a dangerously low 10 per cent to about 16 per cent. He acknowledged that the government faced some politically very difficult decisions and said it “is encouraging to see that the government and the opposition are having serious and responsible conversations,” on this issue.
Improving tax collection, removal of subsidies and increasing GST were some of the measures that were required to be taken.
“The economy needs to be growing at about the rate of eight per cent per annum if employment is to be provided for Pakistan’s growing population,” he added.
According to the British high commissioner, politics in Pakistan had “stabilised” and that “inevitable tensions between institutions of state are beginning to settle” as institutions find their boundaries.
Regarding the law and order situation, Thomson said that questions have been raised about Pakistan as a society and whether they “are prepared to respect the rule of law”.
“Pakistan’s politicians are facing a moment of real responsibility which calls for real leadership,” he commented. “I believe they can do it.”
Mr Thomson also said that no decision has yet been taken to “deny British visas to people who approved of the murder of Governor Salmaan Taseer”.
The British Home Secretary, he said, had the power to exclude anyone for “unacceptable behaviour”, but no decision had been taken to exclude this group as a whole.
Referring to the recent floods in Pakistan, Thomson said he was “very proud of the British response” and that all but £20 million of the £134 million of Britain’s flood aid had been spent.
He acknowledged that some 170,000 people were still living in camps and that Pakistan still faced a massive challenge six months after the devastating floods.
Britain’s flood relief programme was part of the UK’s development programme in Pakistan which “will become the largest development assistance programme in the world”, he said.
Thomson, who completed one year of his tenure in Pakistan on January 21, was addressing journalists at a briefing at the Foreign Office in London.
Published in The Express Tribune, January 27th, 2011.
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