Pakistan finance minister upbeat on remittances
It is essential that development institutions like the Islamic Development Bank (IDB) should not only provide enhanced financial flows but also render the necessary policy advice to member countries to ensure prevention of potentially destabilizing imbalances in future, said Pakistan Finance Minister Senator Ishaq Dar.
Ishaq Dar was addressing in 39th meeting of f The IDB board of f governors in Jeddah.
The minister 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 the IDB’s efforts in generously supporting Pakistan in its efforts to put the economy on a high growth trajectory by bringing about necessary structural changes for a sustained and inclusive growth.
He re-affirmed the government’s resolve to further strengthen its close cooperation with IDB and fellow member countries.
He said joint efforts by governments could go a long way in bringing about prosperity and peace in the Muslim world.
The minister also said that Pakistan’s government was focusing on economic and social progress to strengthen the economy and enhance its inclusiveness.
He said 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.
Ishaq Dar said that his government had 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) Rationalyzing subsidy regime to reduce pressure on the budget and (xii) Tax administration and policy reform to mobilize domestic resources’.
He said Pakistan’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 the 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, said the minister.
“On the external side, exports have maintained positive growth while remittances have also reached a record high of $14.33 billion in the first eleven months registering 12.39 percent growth. In May 2014, remittances exceeded $1.4 billion — once again a record high,” the minister added.
He said: “We are sure that in the wake of IDB’s vision for 1440 Hijri, the bank will become a world-class development institution, inspired by Islamic principles and possessed with the capacity to positively transform the development status of the Muslim world. In its transition toward 1440 Hijri vision, the bank must operate on the Islamic notion of development that is much wider and is centered on the comprehensive development of member states and their population.”