ISLAMABAD: Funding will not be an issue if the government decides to go for a military operation because terrorism has to be eradicated from the country, regardless of the cost, says Finance Minister Ishaq Dar.

“Funding is no issue to get this nation, this country and the people out of this menace but we want to give peace a last chance. We cannot tolerate this (terrorism) to continue,” he said at a news conference held on Wednesday apparently to celebrate almost 8 per cent appreciation of the rupee against the dollar in a few weeks.

He said all institutions of the state — military or civilian — agreed with the prime minister that they would have to work hard to cope with the security challenge and to solve economic and energy problems. He said the government had not yet taken a decision about a military operation in Waziristan because it wanted to give peace process a chance before opting for an operation, the cost of which would depend on its extent and scope.

Responding to a question about the economic cost of the war on terror so far, the minister said there were a lot of direct and indirect costs, including the loss of economic growth, unemployment, future and past gross domestic product, etc., and it was quite difficult to tag it exactly but some people had put it at $80 billion which was not an exaggeration.

About the package announced by the prime minister for drought-affected people of Thar, Mr Dar said he believed Rs1bn assistance would be adequate. But, he added, the amount could be increased if required.

He conceded that reforms needed for good governance in the energy sector, appointment of managers on merit and reduction in system losses had not made any significant progress because of adverse remarks and a judgment of the Supreme Court.

“You must remember adverse remarks of the Supreme Court when a commission to select chief executives started its work and then a sweeping judgment came that virtually blocked everything,” he said.

He said the issues were being streamlined and a lot of things were now under process.

ECONOMY: Mr Dar said the country’s difficult time was now over and better days were ahead. The appreciation of the rupee had reduced Pakistan’s public debt by over Rs800bn in a matter of weeks.

He said the country’s reserves increased to $9.52bn on Tuesday — $4.75bn of commercial banks and $4.77bn of the State Bank of Pakistan.

He confirmed that a contribution of $1.5bn by a friendly Muslim country in the recently established Pakistan Development Fund had helped to improve reserves and the value of the rupee, but declined to identify the country. “Why would you like to expose a friend” who did not want to be identified but showed confidence in the leadership of Pakistan.

He said the fund was established by the prime minister who believed Pakistan required $20-30bn to take up major energy and infrastructure projects like dams, Gadani Power Park and Karachi Motorway and it was not possible through the normal Rs425bn public sector development programme.

He said all macroeconomic targets announced for three years would be kept unchanged to achieve a deficit of 4pc in 2015-16 that was considered a decent level for developing countries.

Responding to a question, the minister promised to pass on the impact of the rupee’s appreciation to consumers through reduction in oil prices when these were recalculated by the Oil and Gas Regulatory Authority (Ogra) by the end of the month. The rate of inflation would also come down with a lag effect, but it was also the responsibility of people and the media to put pressure on transporters and traders to bring down prices to the previous level.

He said all major economic indicators were showing a positive trend in the first eight months (July-Feb) of the current financial year. Even conservative people and independent international institutions like the IMF had acknowledged this improvement.

Mr Dar said even the IMF had revised its projections for Pakistan’s economic growth rate to 3.3pc from its original estimate of 2.8pc and brought down its projection for inflation to 10pc, although the government target was 8.5pc for the current year.

He said the achievement so far did not mean that the government should relax because that was not commensurate with Pakistan’s true potential. In fact, the government has to work harder and concentrate on marketing Pakistan’s image abroad. He said the stock exchange had gone up by 37pc since the PML-N came to power with its market capitalisation going up by 18pc in both the dollar and rupee terms. “In which other country the capital market can go up by 18pc in dollar terms in less than a year,” he said.