Finance minister stresses need for economic independence

Without this, he says, national security cannot be achieved

KARACHI: Pakistan now has a foreign policy that is economically beneficial for the country because the state cannot achieve national security without economic independence, said Finance Minister Asad Umar, while addressing the business community.



Umar visited the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday to address the concerns of businesspersons, talk about economic challenges the government was facing and how he had been spearheading to solve them.

“Our foreign policy will now be driven with economic goals because we cannot achieve national security without economic independence,” Umar said.

Earlier during his visit to the Pakistan Stock Exchange (PSX), Umar said it would be the last time Pakistan would be approaching the International Monetary Fund (IMF) for a bailout package.

While talking about the importance of access to finance for small and medium enterprises (SMEs), the minister said the finance ministry was looking to incentivise the financing for SMEs. He said Pakistan had a high cash-to-deposit ratio of 37%, which was more than double the Bangladesh’s 16%.

“We are trying to bring the ratio down to 25%, which will increase deposits by Rs2 trillion,” he said and added that people had quizzed him about the source of financing for the government’s housing scheme. “It will come from here,” Umar replied, hinting at the deposits.

While talking about the real estate sector, which is said to have provided an avenue for parking black money, Umar said the government did not want to increase tax, but certainly transparency had been highly needed.



“We have two asset classes, one is shares (at the stock exchange) and the other is the real estate. One is highly transparent, but the other is not,” he said.

The buying and selling of land took place at highly under-quoted prices, he said, adding there should be transparent procedures to ascertain the land price.

Earlier, FPCCI Senior Vice President Mazhar Ali Nasir said black money was more secure in the property, but added the investment in the property restricted the multiplier effect that could be achieved if investment was made in the industry.

FPCCI President Ghazanfar Bilour also said the investment in property had been killing the industry in the country. Regarding the Gas Infrastructure Development Cess (GIDC), Umar said it could not be excluded or removed but the issue needed to be settled.

The minister said the government had very limited resources, “which is now concentrating on exports, which right now is a critical issue under the current scenario”.

The business community has also asked Umar to take measures to stop the menace of smuggling, which makes it lacklustre for businesspersons to invest in billions in the local industry.

He said the government has been trying to stop hawala and hundi - illegal cross-border financial transactions, which in turn will starve smuggling.

Two task forces have been made to handle the issue, one will find loopholes in the law and other will work on the enforcement, he added.

Published in The Express Tribune, October 21^st, 2018.

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