LAHORE, April 4: Federal Finance Minister Ishaq Dar said on Friday the government would review the defence budget but the security of the country borders would not be compromised.

Top army officers were also ready to cooperate with the government in reviewing the defence budget, said Dar at the inauguration of a two-day international conference on South Asian Federation of Accountants on value creation by professional accountant here.

He said the government would take measures to provide relief to more than 73 per cent people with income below $2 a day. The yardstick of considering a man earning below $1 a day living below poverty line required to be changed to $2 a day in view of high prices of food and fuel. He said 16 million people had slid below poverty line in the past eight years due to pro-rich policies of the past regime.

He said the coalition government was faced with the tough task of rebuilding the economy ruined by its predecessors. It would have to make a new beginning to resolve the serious economic crisis. The country was facing the twin trade and fiscal deficits. Food inflation increased from 15 to 16 per cent making the goings hard for the common run of people. International donors would be consulted over the economy and measures would be taken to resolve the economic crisis.

He said their predecessors had increased poverty and inflation due to their pro-rich, pro-elite and pro-feudal policies and wanted to make big gains without taxes. It also disturbed macro-economic stability by “criminal” spending in the past 11 months for influencing the election results.

He said his government faced the daunting task of restoring financial discipline and striking a balance between economic challenges and expectations of the people. He said he was reviewing the situation and would give a statement on the economy.

He said the policy of growth adopted by the past regime was not sustainable because the economy was not competitive in most of the items except cars and air-conditioners. The government would promote manufacturing and agriculture sectors because of their capacity for job generation and poverty reduction. The government would encourage only long-term foreign direct investment instead of the existing policy under which foreigners made short-term investment and left the country after making instant profits. He said a long term strategy was required for clearing the economic mess created by the previous regime.

Salman Taseer said the country could no longer afford delaying structural reforms. The country would be marginalised in the global system with increasingly difficult political economy and social challenges if the reforms were not carried out.—Reporter