ISLAMABAD: Finance Minister Muhammad Aurangzeb on Tuesday said the ongoing conflict sparked by the US-Israeli war on Iran has not adversely impacted Pakistan’s remittances from the Middle East.
“Some members spoke of remittances, which is true. [However,] thankfully, there has been no impact on remittances as of yet,” Aurangzeb said while speaking on the National Assembly floor.
“However, the reality is, roughly between 40 to 50 per cent of our remittances are coming from the GCC (Gulf Cooperation Council) countries,” the minister said, pointing out the region’s large contribution.
“So we are also reviewing its elasticity, that what difference it can make on the balance of payments and the current account,” he added.
Noting that other lawmakers had “rightfully” wondered what impacts the conflict would have on Pakistan’s economy, Aurangzeb said the government was regularly monitoring several aspects.
“Not only is the oil and gas bill increasing, but trade and insurance cost has gone up and the vessels available that bring these molecules,” he added.
Commenting on Pakistan’s diplomatic efforts to secure peace in the Middle East, Aurangzeb said, “Pakistan is playing its role, with prime minister sahib, field marshal sahib, deputy prime minister sahib. May God make us take things to the finishing line.”
However, he cautioned that even if hostilities cease soon, the resulting crisis would remain for “weeks and months” as energy infrastructure has been hit and continues to be hit across the Gulf.
During his speech, Aurangzeb detailed that government meetings are held on a daily basis, where steps taken by others in South Asia and even those in Southeast Asia are studied.
“Rationing has begun in a lot of countries […] even people with deep pockets have already transmitted the price. If you compare internationally, in the UAE, petrol prices were increased by 30pc and diesel prices by 70pc,” he said.
The minister cited Bangladesh, Sri Lanka, India, Philippines and Cambodia as examples of nations hit hard by the ongoing crisis.
In an apparent response to remarks made by other lawmakers, Aurangzeb stressed the need to set some facts straight after “statements were made that had no connection with reality”.
The minister highlighted that a blanket subsidy had been given, halting the transmission of oil price hikes to the public from March 14 to April 4.
“It is important to reinforce that a blanket subsidy of Rs129 billion was given,” he asserted, pointing out that funds were sourced through austerity measures, which were also facing a third-party audit.
The budget for Public Sector Development Programme (PSDP) was cut by Rs100bn, Aurangzeb noted, adding that dividends and profits were obtained from state-owned enterprises (SOEs).
“On the question of whether the deserving segments were taken care of or not, so a targeted subsidy was announced right at that time,” he said, referring to the subsidies aimed at bikers, public transport and small-scale farmers.
“We have not just announced the subsidies; the dirbursement are underway and the process had begun on Saturday,” Aurangzeb highlighted.
The minister noted that “very constructive suggestions” had come from the treasury and opposition benches.
“While we should hope for the best, we have to plan for the worst and hope is not a strategy,” he remarked.
