Islamabad, June 25, 2014 (PPI-OT): Federal Minister for Finance Senator Ishaq Dar has said that Pakistan has experienced a triumphant return to democracy. The new governments at national and sub-national levels that took office after the general elections is 2013 have generated hope, expectancy and economic activity in the country.
He was addressing in 39th meeting of Board of Governors (BOG) of Islamic Development Bank (IDB) here today.
He said that government was concentrating upon economic and social progress to strengthen the economy and enhance its inclusiveness. ‘
He further said, ‘The new government has adopted strategies to overcome the country’s macroeconomic challenges.
The incumbent government is now in its second year and has embarked upon reforms agenda in economic and financial sector which includes: (i) Restructuring of Public Sector Enterprises (ii) Power Sector Reforms (iii) Debt management strategy (iv) Fiscal austerity to reduce fiscal deficit (v) Tight monetary policy to check inflation (vi) Building foreign exchange reserves to stabilize the exchange rate (vii) Promoting exports (viii) Incentivizing home remittances (ix) Strengthening social safety nets to mitigate impact of stabilization measures through Prime Minister’s Youth Loan (x) Promoting growth and raising domestic revenues (xi) Rationalizing subsidy regime to reduce pressure on the budget and (xii) Tax administration and policy reform to mobilize domestic resources’.
Reviewing current economic policies and have resulted into robust growth, he said that after a period of 6 years, the country’s economy would grow by over 4 percent this year. At the same time, inflation will remain in single digits. Growth in both agriculture and industry has revived. Fiscal performance is also improving with deficit brought down to below 6 percent from 8.8 percent when the government took office’.
‘This has been achieved due both to austerity in expenditures and an outstanding revenue collection performance which recorded an increase of 16.4 percent in the first eleven months of the financial year.
“On the external side, exports have maintained positive growth while remittances have also reached a record high of US$ 14.33 billion in the first eleven months registering 12.39% growth. In the month of May 2014, remittances exceeded US$ 1.4 billion – once again a record high”, he added
Finance Minister said that the world was transforming like never before. Global production was rebalancing in ways not seen for 150 years. Growth in the cross-border movement of goods, services, people and ideas had been remarkable. Trade accounts for nearly 60 percent of the global output. For the first time in 150 years, the combined output of the developing world’s leading economies including Brazil and China is almost equal to the combined GDP of the longstanding industrial powers of the North—Canada, France, Germany, Italy, United Kingdom and the United States.
This represents a dramatic rebalancing of global economic power since 1950, when the leading developing economies represented only 10 percent of the world economy, he added.
He stated that OIC member countries produce only 10.9 percent of the world total GDP. ‘According to the available economic forecasts, this share will not improve significantly in the short-term.
On the other hand, the share of the OIC countries in the total GDP of developing countries group has declined steadily and is currently recorded at 22.2 percent. Moreover, intra-Islamic World economic disparities are also visible in the fact that only 10 countries produce 73.4 percent of the total OIC countries’ output’, he added.
Ishaq Dar has said that the role of the IDB becomes ever more important to move ahead and to help member countries reform their governance structures, remove structural disparities through growth and development in an equitable and sustainable manner.
This also necessitates that the IDB management must reflect on contemporary global economic realities if it has to remain as effective into the future as it has proved in recent times.’, he added..
He appreciated IDB’s efforts in generously supporting Pakistan in our efforts to put the economy on a high growth trajectory by bringing about necessary structural changes for a sustained and inclusive growth.
He concluded by re-affirming government’s resolve to further strengthen the close cooperation with IDB and fellow member countries. He said that government joint efforts could go a long way in bringing about prosperity and peace in the Muslim world.
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