The Upper House of Parliament on Friday witnessed a heated debate on increasing trend in foreign debt of the government and failure to come up with a road map to overcome the heavy loans which are badly affecting the purchasing power of people. Ishaq Dar, federal finance minister, said that the operation Zarb-e-Azb would cost the national kitty up to Rs 190 billion and out of total money, Rs 45 billion were spent last year, Rs 100 billion were allocated for this fiscal year and Rs 45 billion for the next year.
He was responding to an adjournment motion moved by Pakistan People's Party (PPP) Senator Sherry Rehman, which states that total debt of the country had accumulated over Rs 3.81 trillion and the debt will swell to 68 billion dollars by the end of fiscal year with the approval of latest tranches by the IMF. The motion said that Pakistan will need $6.7 billion this year for service of the external debt. Dar said that 28 wings of Civil Armed Forces (CAF) were being raised to protect the porous border of the tribal areas after the end of operation and for this purpose more funds are required.
"Foreign countries had pledged six billion dollars for the expenses being incurred on the operation but government had received only 350 million dollars which is not considerable amount of money," he added. The Operation Zarb-e-Azb was launched on 15 June 2014 in North Waziristan Agency along the Pakistan Afghanistan border as a renewed effort of the government and military against militancy.
Dar said that total external debt liability of the country was $65 billion and the figure of $68 billion quoted by the opposition was incorrect. Delivering a lengthy speech that was devoid of proper answers raised by the opposition, Dar said that foreign loans had become indispensable for the country as we had been declared as macroeconomic instable country by international financial institutions in 2013.
"The government took loan from the IMF to repay the previous loans," he added. Denying the claims of opposition parties for not giving the roadmap for the revival of economy, he said, "I have given a roadmap in the budget". He invited all political parties to sit together and work out a joint roadmap for strengthening economy. Dar pointed out that the government had curtailed its non-development funds and his ministry seized secret funds of 32 ministries and departments soon after coming into power.
Dar clarified that the external public debt stood at over Rs 18 trillion, adding it would have been far higher if the government had not reduced the fiscal deficit to 5.37 percent. He said the fiscal deficit would be further reduced in years to come. He said transparency was also ensured in floating bonds in the international market. He asked the political parties not to mislead the nation on the issue of external debt.
The lawmakers expressed concern over increase in external and domestic debt. PTI Senator Shibli Fraz said the government wanted to confuse the house over issues including LNG process, the CPEC and economy. PPP Senator Salim Mandviwala said that the country is in debt trap, asking how we will get out of it. "We are paying the local debt after getting foreign debt," he added.
Meanwhile, winding up the debate on the report on implementation of National Finance Commission (NFC) Award, Ishaq Dar clarified that the extension of the 7th NFC Award was not unconstitutional. He said the 7th National Finance Commission Award would continue till the new award. He said that the formation of 8th NFC was delayed due to untimely nominations by the provinces. The house also unanimously passed Anti-Money Laundering (Amendment) Bill, 2015 - an effort by the government to bring further improvements in Anti-Money Laundering (AML) Act, 2010 in line with the suggestions of AML-regime stakeholders.
The objects and reasons of the bill said the amendments are aimed at streamlining the existing AML law in line with international standards, prescribed by Financial Action Task Force (FATF), bringing consistency and clarity in the enforcement provisions. It said the amendments would help the government to ensure that the proceeds of crime and property involved in money laundering are detected, investigated and prosecuted effectively. The bill will now be sent to National Assembly. The house was prorogued sine die.