Political stability must for economic growth: Gilani

* PM appreciates duty-free access for 75 Pakistani products to EU markets

* US trade markets next target for Pakistan

By Hussain Kashif

LAHORE: The national economy cannot strengthen without political stability, Prime Minister Yousaf Raza Gilani said on Sunday.

He was talking to Commerce Minister Amin Fahim, who held a special meeting with the prime minister during his two-day visit to the provincial capital on Sunday and discussed important issues related to trade and the traders.

During the meeting, Gilani said that the Pakistan People’s Party-led government and the trade community were committed to providing relief to the common man to strengthen Pakistan economically. He claimed that all efforts were being made to provide relief to the traders soon.

The PM also appreciated duty-free access for 75 Pakistani products to European Union markets, and said that efforts were on to ensure access for other local products to the EU markets as well. He added that US trade markets would be the next target for Pakistani exports.

He said that import of Pakistani products by European countries was in line with the government’s policy of enhanced trade with the world and not to depend on foreign aid. The policy, he added, would also help enable the government to ensure early rehabilitation of flood-hit people. He said the government’s next target was to gain access for Pakistani products to US markets.

During the meeting, the commerce minister informed the prime minister about the PPP-led government’s achievement of duty-free access for 75 Pakistani products to the European Union markets and said that after years of struggle and trade diplomacy, the European Union had agreed to give Pakistan a break.

Zero-rate export: He said following this, Pakistan had been allowed $1.3 billion, or 900 million euros, zero-rate export to European countries annually and the goods would enter the EU duty-free from January 1, 2011, which was a better opportunity for Pakistani trade in the coming years. He told the PM that the Commerce Ministry was endeavouring to establish better trade relations with Central Asian states through Afghanistan.

It is worth mentioning here that to give effect to the plan, the EU has reportedly suspended tariffs on 75 categories or lines of products that account for nearly 27 percent exports to the EU and it would be for three years. Most of the items in the list are primary and secondary raw materials, and semi-finished goods.

Currently, Pakistan’s overall exports to the EU stand at 3.3 billion euros annually, but after the duty-free access, it would enhance positively. He added that his ministry was analysing likely impacts on the sectors left out and would hold consultations with Pakistani stakeholders. The Pakistan government has also sent to the EU a list of 15 additional items to be added to the 75 items, including bed linen, garments, apparel and home textiles.

Sugar shortage: Wheat export and shortage of sugar in the country was also discussed during the meeting. Fahim, ruling out any shortage of sugar in the country, said that his ministry had not shown any negligence in this regard.

He said provinces were being provided with sugar in accordance with recommendations of the Council of Common Interests (CCI).

Source: Daily Times

3 responses to “Political stability must for economic growth: Gilani”

  1. Pakistan pledges to bring tax reforms

    * Finance minister says PDF provides platform for govt to lay out economic, social strategies, development priorities, reforms agenda

    * Provinces vow to achieve MDGs

    ISLAMABAD: The two-day Pakistan Development Forum (PDF) kicked off on Sunday where the provinces committed to increase their own revenue mobilisation through implementation of the Reformed General Sales Tax and reforming property and other taxes’ collection.

    Chairing the working sessions, Finance Minister Dr Abdul Hafeez Shaikh said,

    “The forum provides a platform for the government of Pakistan to lay out its economic and social strategies, development priorities and reforms agenda.”

    “The non-pledging forum also enables Pakistan’s development partners to better understand the country’s development policy direction and helps in donor coordination and aid effectiveness,” he added. Highlighting the increasingly prominent role of the provinces under the seventh National Finance Commission Award and the 18th Amendment to the constitution, the first day of the forum featured high-level presentations by all provincial governments, besides Azad Jammu and Kashmir and Gilgit-Baltitstan.

    MDGs: In their presentations, the provincial governments reaffirmed their commitment to achieving the Millennium Development Goals. The presentations and the ensuing discussion also focused on the importance of provincial governments making room in their budgets for improving delivery of basic services, including education and skill enhancement, improving health through preventive care and provision of safe drinking water, provision of better infrastructure for greater access from farm to market as well as better employment opportunities for their respective populations.

    The devastating floods that hit Pakistan in July and August this year resulted in unimaginable human tragedy and unprecedented loss to the economy. In the second session – The 2010 Floods, Damage and Needs Assessment (DNA) and Reconstruction – the PDF participants learnt about the government’s rescue and relief operations carried out by the National Disaster Management Authority (NDMA) and relevant provincial agencies with the assistance of Pakistan’s armed forces and various UN agencies.

    The government launched Watan Cards to distribute Rs 20,000 as cash relief grant to the flood-affected people. In rolling out the Watan Cards, the government’s aim is to initiate a transparent, efficient and quick disbursing mechanism to reach out to the flood victims. The total amount distributed through the Watan Cards stands at Rs 29.44 billion, out of which Rs 16.03 billion had already been withdrawn by the flood-affected people.

    At the request of the Pakistan government, the Asian Development Bank and World Bank took the lead in preparation of the damage and needs assessment report. In their presentation, the ADB and WB indicated total damages of about $10 billion.

    The government also presented its institutional framework for reconstruction at the federal and provincial levels. It is keen to strengthen its existing institutions to deliver effectively on its reconstruction strategy. Details were also shared about the institutional structure, fast track project approval and the monitoring and evaluation system. It indicated that it would be responsible for public infrastructure reconstruction, and requested donors to support its Citizens Damage Compensation (CDC) programme. Several donors are considering supporting the government on CDC and are in dialogue with the government to ensure improved targeting, monitoring and grievance redressal procedures.

    In the third and last session of the PDF’s first day – Protecting the Poor – the forum participants were informed that total transfers through zakat, Pakistan Baitul Maal, Employees Old-Age Benefit Institutions and the Benazir Income Support Programme (BISP) showed an increase of 156 percent during the first half of this year as compared with the same period the previous year. The major part of these funds had been disbursed through the BISP to the poor and the vulnerable. The government remains committed to poverty eradication while continuing to develop a safety net for the vulnerable.

    The BISP uses a transparent method for identifying eligible recipients. It has introduced a Poverty Scorecard – a nationwide survey for identifying the poor – together with a database, data validation, and verification. The survey is conducted on a house-to-house basis with 100 percent coverage, although participation is voluntary. The data is then verified from the National Database and Registration Authority database.

    “Pakistan is passing through a revolutionary period after the 18th Amendment with administrative powers and financial resources being transferred to provinces, but this transition needs to be managed carefully,” Dr Shaikh said. “Watan Cards and BISP have earned laurels internationally and the DNA has provided us with a world-class assessment to give impetus to recovery and reconstruction programme,” he added.

  2. Pakistan PM urges donors for patience on reforms
    ISLAMABAD (Reuters) – Pakistan’s prime minister on Monday urged donors to give the country more time to carry out structural reforms, including widening the tax base, as it struggles to recover from its worst floods this summer.

    Cash-starved Pakistan needs all the financial help it can get since the floods inflicted almost $10 billion (£6.22 billion) in losses, but donors’ mistrust over the transparent use of money has slowed donations, Pakistan’s finance minister said last week.

    At the same time, donor and multilateral agencies are also linking the release of aid to Pakistan aggressively pursuing fiscal reforms to increase its tax base.

    Prime Minister Yusuf Raza Gilani said his government was “firmly committed” to economic reforms but that they would take time.

    “Please consider this as work in progress. Kindly be patient with Pakistan,” he said at the Pakistan Development Forum (PDF), organised to present Pakistan’s post-flood plans to donor countries and organisations.

    “Your support and commitment is required over a much longer period, during which we can channel your assistance towards institutional and structural reforms.”

    Even before the floods, Pakistan’s economy faced serious problems, surviving with the help of an $11 billion emergency loan secured from the International Monetary Fund in November 2008.

    As part of conditions set by the IMF, Pakistan has removed subsidies from oil and food items and plans to enforce the reformed general sales tax (RGST) this year but that has faced resistance by politicians and businessmen.
    Donors say while they are willing to help, Pakistan must take steps to reform its economy and generate resources of its own.

    “To realise its economic potential, it (Pakistan) will have to implement some difficult short-term reforms to gain long-term benefits, said Andrew Mitchell, the British Secretary of State for International Development.

    He called for expanding the country’s tax base and said British taxpayers could not be expected to support Pakistan if its own taxpayers did not pay their dues.

    Less tax revenue means Pakistan lacks resources to tackle problems such as security, acute energy shortages and poverty — all of which could contribute to a growing militancy that is already raging in Pakistan’s border areas.

  3. US to provide US 500 million under KLB for flood affected; Holbrooke
    ISLAMABAD, Nov 15 (APP): The US Special Representative for Pakistan and Afghanistan Richard Holbrooke Monday announced US 500 million dollars under the Kerry Lugar Berman Bill for the reconstruction and rehabilitation of the flood affected areas.Addressing the plenary session of the Pakistan Development Forum, Richard Holbrooke said the allocation would form part of the annual US 1.5 billion assistance, and does not include the cost of helicopters and fixed wing aircraft used for the rescue of 30,000 stranded people and distribution of 20 million pounds of relief goods.

    He said the US administration would also try to get the legislation regarding the Reconstruction Opportunity Zones (ROZs) passed from the new Congress.
    He was appreciative of the remarkable resilience of the people of Pakistan and said the quickest way to rebuild homes, replace the lost livestock, rebuild schools and lives was through handing over cash assistance to them.
    He strongly urged the representatives from around 30 countries and five international institutions to assist Pakistan in helping its people in the cash compensation package for the flood affected people.
    Richard Holbrooke said the Obama administration was supportive of Pakistan because it was the right thing to do, however added that “it will also have to show to the American taxpayers that Pakistan’s wealthy also pay taxes.
    He said no country has received so much attention as Pakistan and vowed that it would continue through the next year as President Barack Obama visits Pakistan and President Zardari visits the United States.