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Making all out efforts to streamline economy: Dar
Islamabad—The Finance Minister Muhammad Ishaq Dar
told the Standard and Poors, the Credit Rating Agency that the
Pakistan is making all efforts to streamline the economy. David T.
Beers of Standard and Poors, Credit Rating Agency called on Senator
Ishaq Dar at Madrid on Monday and discussed the macro-economic
situation in the country especially imbalances caused by food and
oil prices, according to a message received here today. Senator
Muhammad Ishaq Dar, Minister for Finance also attended a meeting of
SAARC Finance Ministers in Madrid on April 4, 2008.
He is currently in Madrid to attend the 41st Annual Meeting of the
Asian Development Bank from May 3 to 6, 2008. The meeting was held
on the sideline of the ADB Annual Meeting. Earlier two meetings were
held in India in 2006 and Japan in 2007. The Finance Minister
apprised the Credit Rating Agency that the government is making all
efforts to streamline the economy. Next finance bill will definitely
focus more on revenue generation, targeting subsidies for the poor
and bringing the central bank borrowing in its place, he remarked.
Senator Ishaq Dar said “We are focusing on credible database. Our
special stress will be on agriculture and manufacturing sectors”. He
added that Credit will be made available to these sectors with a
view not to subsidize but for efficient management of these sectors.
For agency, “we are preparing an energy plan but we need
infrastructure support”, he added. Dar stated that “our budget was
doubly hit; one by increase in prices and the other by price
adjustments”.
The subsidies were not budgeted properly in the past, he observed.
On the bond issue, the Finance Minister stated that “we still have
appetite for the sovereign bond but the question is of the pricing”.
Price has improved and we are considering the issue. “We are not
interested in exchangeable bonds”, he remarked. The Finance Minister
spoke in the forum about the current prices shocks being faced by
the developing countries in general and the South Asian countries in
particular.
He stated that the achievements made so far by developing countries
for MDGs may be eroded due to price increase in food and oil and
proposed the SAARC should discuss the issue in the forum to find out
solutions. On Pakistan’s intervention, SAARC forum was moved to
consider the proposal, which was approved to become part of agenda
of the next SAARC Finance Minister’s meeting. Heads of the Nordic
Investment Bank (NIB) and European Investment Bank (EIB) also held
separate meetings with Ishaq Dar, Minister for Finance separately.
Both the leading banks showed their keen interest in extending
financial assistance to Pakistan . NIB showed its interest in
providing financial support in power sector. Senator Ishaq Dar
welcomed NIB’s offer and invited them to finance hydel- projects.
To facilitate their investment, a financing framework agreement will
be concluded between NIB and Pakistan . The EIB, which is a European
Union investment institution, also expressed that they are looking
forward to the possibilities of financing projects in Pakistan in
viable public and private sector projects in infrastructure,
industry, agro-industry, mining and services. They expressed their
keenness for partnership with other multilateral development banks
especially ADB with focus on electricity generation projects as co
financer in joint venture projects.
Dar, asked EIB to finance hydel projects especially Basha Dam in a
consortium with other banks and financial institutions. He also
asked the bank to help Pakistan in energy management i.e. energy
conservation and efficiency. A team, of HSBC also met the Finance
Minister and discussed the possibility of HSBC’s participation in
the government bond issue and operations of HSBC in Pakistan.
Governor State Bank, Dr. Shamshad Akhtar also joined the meeting.
Finance Minister Ishaq Dar also appreciated the keenness of HSBC for
the future government issues and their operation in the banking
sector in Pakistan. He stated that the new government is making a
policy review to avoid pressure on foreign exchange reserves in
future. “We are keen in medium to long term gains instead of short
term benefits”, he remarked.—APP
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