Prime Minister Shehbaz Sharif said on Saturday that the coalition government is working to “repair and normalise” relations with the United States.
The prime minister made these remarks while addressing the Chamber of Commerce office bearers.
“Unfortunately, the previous government (Pakistan Tehreek-e-Insaf) dented our relations with the US. However, the present coalition government has worked towards reviving these relations.
“In the last 15 months, we have worked towards repairing and normalising our ties with the US.
“It is due to these collective efforts that the US has not only welcomed the International Monetary Fund (IMF) agreement, but Antony Blinken’s tweet also reflects that the US desires to see a prosperous Pakistan,” he said.
On Thursday, US Secretary of State Antony Blinken welcomed the IMF’s approval of a programme to support Pakistan, saying: “We stand by the Pakistani people during these hard times.
“We urge Pakistan to continue working with IMF toward macroeconomic reforms and sustainable economic recovery,” he said in a Twitter post.
Earlier this week, the United States welcomed a nine-month Stand-By Arrangement (SBA) agreement between Pakistan and the IMF, saying that it will continue to stand by Islamabad during difficult times.
Meanwhile, on Saturday, the prime minister said that the nine-month Stand-by Arrangement (SBA) reached with the IMF would provide “breathing space” to “reform and restructure our archaic structure”.
“We need to take full advantage of the agreement secured with the IMF.
“We have now been living in a regime where the industry has become nothing but a rental income. We do not want to face competition, nor do we want to invest in research and acquiring modern technology,” he said.
The prime minister said neighbouring India replicated our economic reform programme in the 90s. “India’s then finance minister Manmohan Singh copied our reforms and implemented them in India. Now India is way ahead of us,” he said.
Shehbaz said that the profits earned should be reinvested back into further industrialization and becoming competitive.
The PM said that the government raised the electricity tariff, but “it was the demand of the IMF, but we also need to control our circular debt”.
“I believe we need to bring in basic structural reforms, the tax net needs to be broadened,” he said.
Criticising the Temporary Economic Refinance Facility (TERF) scheme, the prime minister said that the $3 billion should have been provided to the SMEs.
“Big business houses took these $3 billion loans, but they failed to grow exports,” he said.
Referring to his telephonic conversation with Kristalina Georgieva, the Managing Director of the IMF, on Friday, the prime minister said that the IMF chief told him that in the past the Washington-based lender’s deal was breached, which lead to a trust deficit creating difficulties.
“She said due to the efforts of the government the programme was restored,” he said.
Shehbaz informed the attendees that Georgieva told him that during the IMF’s Executive Board meeting, the issue was raised that Pakistan has not previously honoured its commitments with the lender.
He said that despite concerns raised by Finance Minister Ishaq Dar we decided to renew our negotiations with the IMF.
“During my talks with the IMF MD, I was told that the Islamic Development Bank (IDB) has committed $1 billion and a gap of only $1 billion remained, which was met through Ishaq Dar’s efforts,” he added.
“We have saved Pakistan from default, and all stakeholders have played their part in it,” he added.
In a span of days, Pakistan has received $4.2 billion from multilateral and bilateral partners.
Shehbaz lauded the role of China in rolling over commercial and sovereign loans to the tune of $5 billion. “If these loans were not timely rolled over, Pakistan would have defaulted,” he said.