ISLAMABAD: Finance Minister Ishaq Dar has dismissed the perception that foreign exchange reserves of the country have gone up because of borrowing from the International Monetary Fund (IMF).

“The government is using most of the funding received from the IMF to pay back the debt taken from the lender during the tenure of previous government,” he said while speaking at a seminar on “Various circles of economic development and national cohesion” here on Tuesday.

It was jointly organised by the Embassy of Korea and the Institute for Policy Reforms. Dar also rejected the talk of heavy cost of borrowing, stressing that it was a mixed transaction and the average cost of total government borrowing for the past two years was 3.6%.

“We must have to show our presence in the international market in order to attract foreign direct investment,” he said.

The minister expressed the belief that foreign exchange reserves of over $20 billion would definitely instil confidence in foreign investors. He highlighted that the growth in the country’s economy reflected the improvement in macroeconomic indicators. “In FY14, Pakistan achieved 4.02% GDP growth – the highest in six years – and increased it to 4.24% in FY15, the quickest in seven years.”

The minister boasted that the fiscal deficit, which stood above 8% when the current government took over in mid-2013, was brought down to 5.3% in FY15.

He declared that the government would be able to overcome the energy crisis by early 2018 as 10,600 megawatts of electricity would be added to the national grid. At present, the electricity shortfall stands at about 5,000MW, but work on projects of 24,000MW is under way, some of which will start generating 10,600MW by the end of 2017 or early 2018.

Speaking about South Korea’s contribution to Pakistan’s economic development, Dar said the 2015-17 Economic Development Cooperation Fund Framework Agreement amounting to $500 million, which was signed earlier this month, would lead to initiation of different projects pertaining to hydroelectric power, road construction, agriculture, improvement in power distribution system, information technology and health care.

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