ISLAMABAD: The incoming Pakistan Tehreek-i-Insaf government plans to offer profitable dollar bonds to overseas Pakistanis, place China-Pakistan Economic Corridor (CPEC) agreements before parliament, but is unlikely to offer any relief to the people in the first 100 days in office.

Speaking at the first formal press conference after the recent elections, the likely new finance minister Asad Umar said that offering any relief or subsidy to the people in first 100 days was like giving lollipops. He said the first 100 days would also not see a decision that would change the destiny of the nation, but a clear direction on what “we promised and where we are headed for stock-taking”.

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He complained that the local and international media did not quote him accurately in recent reports about the need for $12 billion foreign financing, privatisation of 200 companies, including the Pakistan International Airlines and Pakistan Steel Mills, and so on. He said there was no discussion so far on revising budget and non-transparency in foreign loans was the real challenge.

Mr Umar said the PTI so far did not have access to real data, nor did it have any outside view of the latest situation but based on the best available information, one thing was clear that the requirement was reasonably urgent to examine all available options to finance external account. “The situation is such that we don’t have the luxury of choosing one option, but will have to plan all options in parallel, including the IMF support within six weeks.”

Asad Umar says CPEC agreements will be placed before parliament, expats to be offered profitable dollar bonds

The PTI leader said Sukuk bond, Eurobond, bilateral and multilateral options were on the table, but most importantly his party wanted to tap into overseas Pakistanis’ potential in a big way. “The Pakistanis abroad have a sentimental relationship with PTI and Imran Khan and we plan to give them debt instruments with returns better than what they are getting at present so that they could also take a pride in nation building.”

See: How the Pakistani economy survived a second transition of democracy

He said it could be on the pattern of dollar-denominated bond of the Central Directorate of National Savings and the people abroad also wanted its tradability. Secondly, he added, overseas Pakistanis would also be offered equity instruments, for example, in real estate, but by taking risk away from those who had bad experiences of their investments. “There is no size decided, nor market assessed” and it would depend on the situation and demand, he said in response to a question.

Mr Umar said all agreements should be transparent and placed before parliament unless some real secret was involved. He said his party had been demanding that the CPEC and LNG agreements should be presented in parliament and it would now ensure that economic decision-making was transparent.

In reply to question, he said that after a lot of efforts at the level of parliamentary committees he had been able to access the details about the CPEC agreements and there was nothing in those agreements to hide. “Yes, we will bring them before parliament to ensure transparency.”

At the same time, Mr Umar said there was no question of going back on any international commitment or reopening any agreement unless some clear wrongdoing or corruption appeared and there should not be any problem to take them up with the Chinese government which was aggressively fighting corruption which was neither in the interest of China nor Pakistan. Likewise, he said the LNG agreement with Qatar would also be presented before parliament.

He said the Chinese ambassador held a meeting with PTI chairman Imran Khan and had a follow-up session with him in which matters relating to taking the CPEC to the next level were discussed without any specific proposals. He said no loans were discussed with the Chinese, but “we have an assurance that China as a friend would stand by us”.

He criticised the Pakistan Muslim League-Nawaz government for presenting an unrealistic budget and reckless spending for political means and borrowing heavily which had increased fiscal deficit for the last financial year to 7.1 per cent from a target of 4.1pc. “We never have such expansionary monetary and fiscal policies, while current account deficit reached an unsustainable level, from $2 billion a year when the problem started to $2 billion a month when the PML-N left.”

Mr Umar said the availability of bankable data on everything was the real challenge and even power production and supply numbers were unrealistic, adding that commercial loans were not a problem, but the problem was with transparency in all sectors and agreements.

He said the situation in Pakistan was dire at present and required tough decisions for course correction, adding that it would be unfair so say that Pakistan had never been to dire situations like this before and it came out of problems in the past and there was no reason not to overcome challenges this time.

Mr Umar claimed that no real reforms had taken place over the past five years and it was not only failure of the government but also the IMF as the two together “kept glossing over the challenges with Panadol to bring down fever instead of curing the disease with real reform”.

He said all the loss-making entities would be taken out of the control of line ministries that protected the status quo and placed under a wealth fund whose ownership would remain in the name of the president of Pakistan. There would be no need for seed money and would keep getting financing from the finance ministry as before.

He said there was no truth in reports about deals to free former prime minister Nawaz Sharif. He said the best relief for the people could be real reforms that included reduction in indirect taxes which have touched 90pc now and increase recoveries from direct taxes. He said Imran Khan would not distribute jobs in D-Chowk, but increase revenues, reduce expenditures and open up six areas for investments and job creation.

Published in Dawn, August 8th, 2018