The government of Pakistan has taken steps to establish an Islamic economic order in the country.
GV EXTERIOR Islamabad Secretariat building with Pakistani flag flying outside.
SV INTERIOR Pakistan Finance Minister, Ghulam Ishaq Khan, speaking in Urdu.
SV Reporters taking notes.
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Background: The government of Pakistan has taken steps to establish an Islamic economic order in the country. Recently, the President, General Zia Ul-Haq, imposed an Islamic wealth tax, and the Finance Minster has now moved towards replacing the use of interest payments in Pakistan's financial system.
SYNOPSIS: The finance Minister, Ghulam Ishaq Khan, announced his plans to restructure the economy and phase out interest-bearing loans in his annual budget published in Islamabad.
The Minister's measures were based on the sacred Islamic law, Sharia, which covers nearly every aspect of life, including financial transactions. Those companies which wish to take advantage of interest-free facilitates will have to be approved by a religious board as Mordaraba firms - Mordaraba is the Islamic word for sharing .Instead of interest, subscribers will take a share of profits. Pakistan's nationalised commercial banks will open separate interest-free deposit counters at which funds will be invested in Mordaraba. Foreign banks were excluded from the new arrangements.
Mr. Khan also predicted an economic growth rate for Pakistan in the coming year of more than six percent. Last year's balance of payments deficit had been reduced by 360 million dollars (US) on the previous year's figure. The budget gave no details of defence spending, but did earmark funds for nuclear energy. More than 12 and a half million dollars (US) has been allocated to the nation's controversial nuclear programme.