New Pakistan finance minister will have tough job

[mujahideen]

New Pakistan finance minister will have tough job

By Augustine Anthony

ISLAMABAD (Reuters) - As economic storm clouds gather over Pakistan, two names have emerged as front-runners for the finance minister's slot.

Whoever gets the job in the country's new government will have to deal with widening budget and trade deficits in an economy pressured by rising international oil prices and chronic shortages of energy and staples.

The two main opposition parties that won last month's election are working out their coalition government line-up though no posts have been filled, not even that of prime minister.

The Pakistan People's Party (PPP) of assassinated former prime minister Benazir Bhutto will lead the incoming government expected to be sworn in later this month.

Its main partner is the the Pakistan Muslim League (Nawaz) of Nawaz Sharif, the prime minister President Pervez Musharraf deposed when he came to power as a general in a coup in 1999.

A Sharif party official said if the party got the finance portfolio, it wanted the post to go to Ishaq Dar, who served as commerce minister and finance minister in one of Sharif's governments in the 1990s.

A PPP official said the PPP wanted Sharif's party to take the finance post, adding the PPP had "a lot of respect for Mr Dar". But if the post came to the PPP then another former finance minister, Naveed Qamar, was expected to be the party's choice.

Analysts were generally favourable about both the possible candidates, but some said Dar, an accountant and former businessman, had more experience.

"Ishaq Dar was a very good finance minister. He's very well informed and knows the job," said S.M. Muneer, a former president of the Federation of Pakistan Chambers of Commerce and Industry.

"He was one of the best Pakistani finance ministers. A very humble and down-to-earth person."


"DARNOMICS"

Dar, 60, was commerce minister in a pro-business Sharif government in 1997 and identified export-led growth as a cornerstone of economic strategy. He set ambitious export targets and relaxed restrictions on imports of raw materials from India.

He became finance minister in November 1998 and concluded negotiating an IMF rescue package to meet an economic crisis triggered by sanctions over nuclear tests in May that year.

Throughout the negotiations he refused to accept a devaluation or a rise in utility charges or tax rates.

"Whether you call it voodoo economics or Darnomics, he has moved things," the head of a state-run bank said a short while later.

But Dar, a top student from Punjab University, was criticised for what some saw as a naive approach to markets, blaming speculators for every rapid movement of the currency and stocks.

Dar was detained for nearly two years after Musharraf overthrew Sharif.

Qamar, as chairman of the Privatisation Commission under Bhutto in 1994, set an ambitious two-year target for Pakistan to complete its privatisation programme.

A big landowner from a prominent political family in the southern province of Sindh, Qamar, now 52, was a staunch Bhutto loyalist and was made privatisation minister in July 1996.

Three months later, the American- and British-educated Qamar took over the finance portfolio from Bhutto.

Analysts welcomed his appointment, saying it would improve credibility with the International Monetary Fund after uncertainty over who wielded economic influence.

He was only finance minister for a few days before Bhutto's second government was dismissed over corruption accusations. Qamar was detained for a period but never convicted.

"Both would prove a good finance minister. Ishaq Dar is very competent while Naveed Qamar is also very polished," said Azhar Saeed Butt, deputy of the Federation of Chambers of Commerce.

"Qamar was privatisation minister and knows the economy and would not be a bad choice but if Dar is given a chance then he would have an edge as he knows the problems at the ministry."

© Reuters 2008 All rights reserved

 

[mujahideen]

Next coalition faced with gigantic economic issues

Monday, March 17, 2008
By Mehtab Haider

ISLAMABAD: Major coalition partners, including the PPP, PML-N and ANP, are devising their future strategy to turn the dwindling macro-economic indicators around and to take practical steps to control the inflationary pressure in the months ahead.

The three major parties have agreed to continue the privatisation process and also to take short-term and long-term steps to ensure a quantum leap for boosting the dwindling exports and to avoid fiscal and external vulnerabilities.

The economic wizards of the three parties are also discussing steps to control the yawning trade deficit by minimising the imports of luxury items, the sources added.

"Yes, all the three parties, including the PPP, PML-N and ANP, are evolving a consensus namely the minimum common agenda, which includes achieving improved macro-economic situation and controlling the galloping prices, especially of food items," a high-level official of a mainstream political party, who is involved in the consensus-building exercise, told The News here on Sunday.

The future coalition, the sources said, also agreed to refrain from further burdening the masses by jacking up the POL prices, at least, in the remaining three months of the current fiscal year.

Pakistan's economy is facing numerous challenges, including twin deficits – current account deficit and fiscal deficit – as well as stagnant exports, tax revenues and almost a halted privatisation process.

Inflation is another big challenge for the upcoming economic managers and improving the supply side coupled with better management can reduce woes on this front.

The coalition partners, the source said, are working out a strategy for tackling difficult and complex issues, keeping in view their own manifestos and striving hard to evolve a consensus among the ruling coalition partners.

PML-N Secretary Information, Ahsan Iqbal, who is also a potential candidate for a ministerial slot in the future set-up, on being contacted for comments, said that the PPP, PML-N and ANP were working to come up with minimum common agenda, which will be announced before the nation to put the things back on the track.

"We are going to evolve a consensus on this agenda within one or two week period," Ahsan Iqbal said and added that it would also include ratification of the macro-economic situation and steps to control the prices. He said that they would finalise it within one or two-week period.

However, official sources in the Finance Ministry said that the economy could not be put back on the track without bringing our house in order, adding that the pattern of the 90s could not be followed to run this huge economy on which international investors had invested their money by subscribing to bonds issued by Islamabad.

The official said another challenge for the next government would be the consistent cash-bleeding of major public sector institutions such as Wapda, Pakistan International Airlines (PIA) etc as these two institutions were going to cause losses to the national kitty of over Rs 100 billion in the current financial year.

According to independent economic analysts, the next government will have to swallow the twin deficits – fiscal deficit and current account deficit – as well as low GDP growth than the actual target, low revenue collection, pressure on rupee, shrinking investments and stumbling privatisation process, which will be a quite similar situation to the decade of the 90s.

The revised forecast for the external current account is likely to be around US$9.5 billion for full FY08 (6% of GDP), up from an earlier estimate of US$6.5-7.0 billion (approx: 4.3% of GDP).

The revision mainly reflects a higher oil price assumption, touching more than 111 dollars per barrel, as well as a moderately lower GDP base.

Next coalition faced with gigantic economic issues

 

[mujahideen]

PPP to reveal real economic situation to people

By Mazhar Tufail

ISLAMABAD: Faced with a serious economic crisis even before assuming the power, the top PPP leadership has decided to tell the masses flat out the country’s economic situation in an attempt to muster public support and understanding.

Senior PPP members have confided to The News that the party leadership has already been in touch with economic experts, having long discussions on the country’s economic situation aimed at finding some sort of solutions that may help provide immediate relief to the masses.

“Zardari had at least two meetings with foreign economic experts of international repute over the last few days,” sources disclosed.

“He (Asif Zardari) also held meetings with top party experts as well as the PML-N on economy in which ways and means had been discussed to provide relief to the masses, most probably in the shape of providing subsidies on essential commodities like flour, oil, sugar and grams as well as substantial upward revision of pay scales of government employees and raising minimum wages of labourers,” sources disclosed.

They said Zardari has almost finalised an ‘open meeting’ to be held soon after the announcement of federal cabinet in which top economic wizards of the country, the State Bank governor, secretaries of economic affairs division, finance and commerce, and FBR officials would be present. The media would be provided details of the meeting as well.

“What we are trying to do is to adopt an ‘open policy’ where we would be hiding nothing from the media, hoping it would help inform the masses about the real economic health of the country and measures needed to deal with the situation,” he said.

“Not only that the country is faced with a serious economic crisis the energy crisis would be the second most important issue to deal with by the upcoming government. The scenario appears to be bleak, calling for some extraordinary measures and that is what everybody in the party is pondering upon these days,” he said.

PPP to reveal real economic situation to people

 

[Plasma]

Now Zardari will tell the people of pakistan that mushy did nothing for the economy and it is actually on a very steep decline and we are loosing money, while he will be busy filling his pockets.

 

[Quwa]

Now Zardari will tell the people of pakistan that mushy did nothing for the economy and it is actually on a very steep decline and we are loosing money, while he will be busy filling his pockets.

He'll tell the people just that...AND he will allow foreign firms to take over Pakistan's key assets. I just hope he makes the mistake of touching HIT, KSEW & PAC and get booted the way he deserves.

 

[maqsad]

He'll tell the people just that...AND he will allow foreign firms to take over Pakistan's key assets. I just hope he makes the mistake of touching HIT, KSEW & PAC and get booted the way he deserves.

Why are you suddenly so much against foreign control of the pakistani economy? Last year you were fighting me and others on PDF and insisting foreign investment was pakistan's savior and you even defended foreign banks buying out privatized pakistani banks. Why the 180 turn now?