The focus will be on business-to-business instead of government, Chinese companies will be persuaded to move production units to Pakistan in CPEC Phase 2.
Muhammad Aurangzeb addressed a high-level discussion on the increasing burden of global debt on developing economies as a panelist during the World Economic Forum.
During this, he explained his perspective on establishing strong and resilient economies through changes in fiscal policies and debt sustainability.
The Finance Minister said that Pakistan’s biggest problem has been the twin deficits of the current account and fiscal account. The main reason for the fiscal deficit is the unsustainable tax-to-GDP ratio of 9 to 10 percent. Efforts are underway to increase the tax-to-GDP ratio to 13 percent due to structural reforms.
He said that it is impossible to achieve a respectable position in the community of nations without increasing the tax-to-GDP ratio.
Finance Minister Aurangzeb said that the government is trying to reduce its expenses and reduce the volume of debt payments, it is difficult to get rid of the burden of debt without fixing your own house.
The Finance Minister said that the debt-to-GDP ratio in Pakistan has come down from 78 percent to 67 percent, taking loans is not bad, but proper use of loans is necessary.
Muhammad Aurangzeb said that instead of running expenses with loans or giving subsidies, exports should be promoted by increasing productivity, Pakistan’s economic growth has been volatile, as soon as the GDP growth rate reaches 4 percent, the balance of payments deteriorates due to the economy’s dependence on imports, and every time the balance of payments deteriorates, it has to go to the IMF.
He said that achieving sustainable development is Pakistan’s top priority, they are pursuing a policy of changing the DNA of the economy and stabilizing the economy through exports, the private sector will have to play a leading role in economic development.
The Finance Minister said that the 10-year partnership program with the World Bank will help overcome the growing population, poverty and environmental problems and move towards sustainable economic development. CPEC Phase II will focus on business-to-business instead of government-to-government. In CPEC Phase II, Chinese companies will be persuaded to move production units to Pakistan.
According to the Finance Minister, Chinese companies can make Pakistan the center of their exports. Pakistan wants access to the world’s largest and deepest Chinese capital market through Panda Bonds. Pakistan wants to learn from the experiences of Egypt and diversify access to the capital market and improve credit ratings.
Muhammad Aurangzeb said that there are immense opportunities for the youth in Pakistan’s IT sector. It is a positive thing that Pakistani youth are getting good jobs around the world. Efforts are underway to create good job opportunities for the youth in the country. Job opportunities will be created in the private sector through a sustainable policy framework and policy continuity.
