Finance Minister urges sustained US economic cooperation

WASHINGTON: Finance Minister Dr Abdul Hafeez Shaikh has renewed Islamabad’s commitment to reforms and called for expanding Pakistan-US economic relationship from government to private sector. Dr Shaikh was part of the high-level Pakistani delegation that attended the third cabinet-level Pakistan-US Strategic Dialogue here last week.According to remarks made by the Minister, available here on Tuesday, Dr Shaikh highlighted the importance of cooperative ties in various sectors of the economy.“The relationship has to go beyond the governments to business and the people.  We are committed to reform. We want to mobilize our own resources.  We are working on a sustainable medium to long-term growth strategy,” he said.Pakistan, he said, wants to protect vulnerable groups. “We want to fulfill the destiny of our people. But, in today’s globalized world, no-one can do it alone. That is why we seek your investment, access to your markets and a level playing field. We want to harness the potential of our people. For this reason we look for more trade rather than relying on aid,” he said at the plenary session of the dialogue.Shaikh called for durable economic ties beween the two countries.  “The test of success depends on enhancing the security and economic prosperity of our citizens.”Meanwhile, it has been reliably learnt that President Obama expressed his appreciation for Finance Minister Shaikh’s hard work toward improving the Pakistani economy.Dr Shaikh led the Pakistan economic team in five sessions at the dialogue including Energy, Economic, Market Access, Floods Overview and Strategy and Implementation of US Assistance. He also had a number of meetings on the sidelines including Vice President World Bank, IMF Mission and Ambassador Holbrook apart from speaking at a public event with David Lipton, US Senior Director, National Security Council at the Center for Global Development.

The Minister gave a comprehensive briefing to the Congressional staffers as well as the US Administration officials about the government’s response to flood and the reconstruction framework for post-flood rehabilitation and economic recovery.He emphasized that the Compensation for Citizen’s Damage through Watan Cards is transparent, speedy and would help in early turnaround.“The Government is willing to have dialogue with the donors to further strengthen the system but the donors must pool-in their resources for supporting this cash transfer scheme to 1.6-1.8 million households.We want to help our people to rebuild in accordance with their choice rather than superimposing fancy models.”
On Finance Minister’s convincing arguments, the US side has agreed to look at the scheme very closely and to reprogram and redirect economic assistance for FY2010 towards post-flood rehabilitation and reconstruction, official sources said.

It is believed that the US would complete its internal rethinking soon and this reprogramming is likely to be announced during the Pakistan Development Forum being held on November 14-15, 2010 in Islamabad.Dr. Shaikh also urged very strongly that “Kerry-Lugar-Berman releases should keep pace with announcements to have an impact.
The Finance Minister also highlighted the recently constituted Oversight Committee to oversee and monitor implementation of post-flood rehabilitation and reconstruction. He emphasized that Pakistan has a requisite time-tested institutional arrangement for approval and implementation of projects.“However, we are willing to work with the major donors to work out modalities for enhancing capacity and fast-track approval processes to implement reconstruction projects.”

During his meetings with the US Administration, IMF and the World Bank also updated them on the progress in energy sector as well as tax reform. The IMF Mission would soon leave for Pakistan to commence its deliberations towards completion of 5th Review of Stand By Program. The World Bank has already approved $ 300 million flood-related import financing program under Emergency Procedures and would be taking another two projects to its Board for approval: Highway Rehabilitation for $ 25 million and Khyber-Pakhtunkhawa Emergency Operation of $ 250 million.  The World Bank has also agreed to mobilize additional resources including grant for Pakistan.The US leadership has also indicated to push Pakistan-American Enterprise Fund and Reconstruction Opportunity Zones’ legislation as soon as the new Congress is convened. Approval of these two legislative pieces would boost trade and drive business-to-business relations between private sectors of the two countries. These are expected to create jobs and market products.

The US side appreciated that the current economic team of Pakistan has ‘a fairly good plan and good approaches’ to the challenges facing the country, sources said.Pakistan has “stepped away from the balance of payment crisis since 2008” but need to continue with its plans for energy sector and tax reform. The American officials are quoted to have said that mobilizing its own resources would ‘build credibility’ of Pakistan amongst donors and international community.The US would continue supporting Pakistan in achieving macroeconomic stability and overcoming economic challenges, the officials assured – App