WASHINGTON: Federal Minister for Finance and Revenue Muhammad Aurangzeb, who is leading a Pakistan delegation in the IMF and World Bank-2024 Spring Meetings here, on Tuesday (16th April, 2024) highlighted the country’s roadmap to cope with the confronted challenges and put economy on sustainable growth trajectory.
In an interactive session with Atlantic Council’s Geo-Economics Center and South Asia Center titled “Opportunities and Challenges for the Pakistani Economy through 2024 and Beyond”, he outlined Pakistan’s key measures to achieve economic stabilization by increasing tax-to-GDP ratio, undertaking end-to-end digitalization of FBR, reforming State-Owned Enterprises (SOEs), boosting exports, increasing remittances, improving business environment and attracting foreign direct investments.
Sharing Pakistan’s current economic landscape, he said the country had entered in a much better shape this year than the beginning of the last year, adding it had to do a lot with the nine-month SBA program which in turn “ushered in a macroeconomic stability for the country.”
He said the country’s overall GDP was moving in the right direction, although the headline number was not that significant, however different sectors were performing well.
He said, agriculture witnessed 5 percent growth owing to bumper crops; services sector was moving quite well and inflation had come down from the peak of 37-38 percent to closer to 20-22 percent while the exchange rate was stable.
“So all of this has moved us in the right direction, now we will take it forward from here [for which] we need, in the first instance, permanence in the macroeconomic stability,” adding the government had initiated discussion with the IMF on the larger and extended program that would help put economy on sustainable growth path .
The finance minister was of the view that the “timely decisions and timely executions” were the key aspects to run even the smallest institution or the largest country on the planet.
He said Pakistan does not need too many policy prescriptions as “we have known what and why, not for years but the decades.
“We know to have focus on tax-aspect, tax-to-GDP, investment-to-GDP, increasing exports, getting the circular debt in order and accelerating the privatization agenda.
“These are some of things that my predecessors had been signing with the Fund. It is time for us to start moving with execution of some of these aspects,” he added.
Aurangzeb said Pakistan was looking for a larger and extended program as it would need two-three year time period to go through the structural reforms program.
The finance minister termed discussions with IMF mission that visited Pakistan last month for the 2nd and final review of the SBA program ‘very constructive and positive.’
Talking about revenue generation, the minister said the government on short term basis intends to cut down on the leakages [in revenue collection] and ensure speedy decisions by tax tribunals.
More importantly, he said, Pakistan needed to bring untaxed and under-taxed sectors in the tax network, under the medium term agenda “We have started moving in that direction,” he remarked.
Under the transformation program, he said the country had already started the process of end-to-end digitalization of the tax system to minimize human intervention.
This week, he said, world-class consultants were being shortlisted which hopefully would be appointed by end of the current month, with the mandate to work on the design framework and its implementation, ensuring transparency.
“The client experience will bring back trust and confidence into the tax authority, which is very important, ” he maintained.
Commenting on other measures to stabilize the national economy, the finance minister stressed the need for controlling expenditures, operational expenditures, and infrastructure development with public-private partners at the federal and provincial levels.
Quoting a study of the World Bank, he said, the GDP per capita could go up by 26 percent if the issues related to human capital, especially the stunting growth were addressed:“But we can’t do it till we have the fiscal space.”
Aurangzeb also talked about operationalization of a ‘single-window’ mechanism for doing business in Pakistan not only for foreign investors but starting it for domestic investors also.
He said information technology and agriculture sectors presented huge up sights, and different projects in metal and mining fields like Reko Diq could become a real game changer for Pakistan.
Newspakistan.tv/APP
