May 11, 2008	Sunday	Jamadi-ul-Awwal 5, 1429

ISLAMABAD: Finance Minister Ishaq Dar does not foresee any serious law and order situation emerging from the growing food prices which, he otherwise admits, are causing considerable problems, particularly to the low-income groups. “The increase in the food prices is a global phenomenon, therefore, I really do not see any emergence of riots in our part of the world,” he said.

In an interview with Dawn, the finance minister, however, said that a number of bold and unpopular decisions would have to be taken to improve the economy, which, he said, was “destroyed by Shaukat Aziz and company”. He expressed the hope that coalition partners would realise the gravity of the economic problems and would not seek unfair favours for their respective voters.

The minister said that the whole world was experiencing acute food inflation and that Pakistan was not an exception. He quoted the example of the price of a rice bag in Saudi Arabia which, according to him, had risen from 25 riyals to 125.

“However, it does not mean that we should leave our poorer segments of society on the mercy of increasing international oil prices,” he said, promising that the coalition government would offer a relief package to the needy and the poor in the next budget and that their legitimate essential requirements would be met.

Mr Dar said that his ministry had already started working on a plan aimed at identifying the poor who would then be offered a certain relief package in the forthcoming budget. He said that he did not want to rely on traditional Zakat and Baitul Mal committees to provide this relief. “I want this job to be done through some credible source so that there is no complaint about it,” he said, adding that as soon as the number of “genuinely poor families” was identified, some mechanism would be evolved to help them on a consistent basis. He was of the view that five million such family units, adding up to 30 million people, were likely to be identified across Pakistan.

When asked if the promised relief would have a cash component, the minister said that “pro-poor targeted subsidy” will be given which might include cash or subsidised food items.

Responding to a question, Mr Dar said that rising international oil prices were causing increase in food prices and that the government could hardly do any thing about it. “We have to continue increasing oil prices to ensure fiscal deficit at 6.5 per cent of the GDP by June this year,” he said.

He said the government wanted to offer relief immediately on assuming power, but could not do so due to the weak financial position it had inherited. He accused the PML(Q) and interim governments of making the life of the common man miserable by not taking timely decisions. “They did not raise oil prices for well over a year and this also caused serious budgetary problems,” he said.

The minister also blamed the previous government for not tackling the problem of smuggling and hoarding of essential items which had only compounded the issue. However, he said that the coalition government was trying to tackle the issue by taking administrative measures and by importing more wheat soon.

Talking about the ongoing energy crisis, he said that previous government remained busy in playing dirty politics. Not a single mega watt of electricity was generated during the last eight years which, he said, stressing that such an inexplicable attitude was the root cause of the prevailing situation. “This crisis cannot be controlled or overcome in days. It will take some time to manage it,” he said, admitting that the country’s industrial sector was suffering heavily. Asked about the weak financial position and its remedy, Mr Dar said that the government would have to rationalize the existing taxes and perhaps go for some new taxes to address the issue. However, he said that lower middle classes and the poor segments of society will not be burdened with additional taxes. “In the first place we plan to avoid new taxes and if at all they were to be levied, the government would take into account all its aspect,” the finance minister said.

Mr Dar also agreed that without creating an investor-friendly environment and improving the overall security situation, it would not be easy to attract sizable foreign investment in the country. He termed his recent interaction with international donor agencies as “very fruitful” in terms of securing additional financial assistance as well as to expect from them to help lure foreign investment in Pakistan.

He said that International financial institutions, investment houses, commercial banks and credit rating agencies were carefully monitoring developments in Pakistan. But he said that since the change of guards, foreign agencies as well as bilateral donors appeared to be more willing to support Pakistan.