Finance Minister Muhammad Aurangzeb has called for a concerted effort from all sectors to enhance Pakistan’s export capabilities. In a speech delivered to the business community in Peshawar on Wednesday, Aurangzeb emphasized the importance of moving beyond the historical cycle of economic booms and busts that the nation has experienced.
The minister highlighted the challenges faced when the country achieves growth but remains heavily reliant on imports. “It’s very easy to just pump in liquidity,” he remarked, noting that such growth can lead to a depletion of foreign reserves and balance of payment issues, often resulting in turning to the International Monetary Fund (IMF) for assistance.
Reflecting on the financial crisis of 2023, where foreign reserves plummeted to $4.6 billion—barely sufficient for three weeks of imports—and the rupee faced a significant devaluation, Aurangzeb pointed out that this necessitated a three-year, $7 billion aid package agreed upon with the IMF in July 2024. The agreement aims to secure macroeconomic stability and foster inclusive growth.
Aurangzeb reiterated the government’s commitment to supporting key sectors such as textiles, agriculture, and IT. However, he stressed that export responsibilities extend beyond these industries, urging businesses to contribute even modestly to export figures. He predicted that rice exports would reach $4 billion this year.
In addressing reforms within the Federal Bureau of Revenue (FBR), Aurangzeb outlined measures to minimize human involvement in tax collection, which he identified as a source of corruption. He explained that by shifting tax policy formation from the FBR to the finance ministry, decisions could be made with economic considerations in mind, allowing the FBR to focus on tax collection.
This move is part of a broader strategy under the IMF’s Extended Fund Facility, which involves establishing a Tax Policy Office (TPO) to formulate tax policies backed by economic forecasting and analysis of international tax obligations. The TPO is expected to enhance policy implementation under the supervision of the finance minister.
Aurangzeb’s statements underscore a push towards a more export-driven economy, with a broader participation from various sectors to ensure sustainable economic growth and stability in Pakistan.
