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+--- Thread: Pakistan economy shaping up (/thread-pakistan-economy-shaping-up)
Pakistan economy shaping up - sajjad_dar2000 - 09-07-2005
Today Pakistan economy is much better shape than it was ever before. Pakistan is poised to catch China in term of growth for the fiscal year of 2005-2006. in 2004-2005, Pakistan economy grew by 8.4%, which is one of the fastest in the region. Progress is taking place throughout society. Thanks to the widespread reform s introduces by the President, Perviz Musharaf. Foreign companies are investing billions of dollars to pursue the opportunities of a market of world sixth largest population. A change is evident throughout the society
ISLAMABAD (September 06 2005) The Asian Development Bank (ABD) President, Haruhiko Kuroda, on Monday advised the government of Pakistan (GoP) to do away with its policy of granting subsidies to agriculture and certain other sectors. He said that a subsidy-free culture would help Pakistan sustain its as high as 8 percent growth rate in the coming years.
Haruhiko Kuroda expressed these views in the meeting with Pakistan's economic team.
The ADB chief also asked Pakistan's economic managers to follow a policy of 'cautioned vigilance' to strict check on rising inflation.
He said that ADB would increase yearly funding from $900 million to $1.5 billion in 2006. He asked the ADB team to review the whole process of project development and disbursement to reduce the project cycle time.
Dr Salman Shah, Adviser to Prime Minister on Finance, Revenue, Economic Affairs and Statistics, led the official team in the meeting that briefed the ADB delegation on economic development and the strategy for the future.
Salman was assisted by Minister for Privatisation Dr Abdul Hafeez Sheikh, Finance State Minister Omar Ayub, Hina Rabbani Khar, Governor State Bank of Pakistan (SBP) Dr Ishrat Hussain, Economic Adviser Finance Division Dr Ashfaq Hasan Khan and Federal Secretaries of Ministries of Finance, Communications, Water and Power, Planning and Development.
Welcoming the ADB President and members of the delegation, Salman said that Pakistan's economic policies had started to pay good dividend to the people. Highlighting various initiatives and reforms introduced by the government to improve the financial sector, good governance, eradication of corruption Dr Shah said that when President Musharraf took over, Pakistan's economy was in a bad shape. Fiscal deficit was out of control; public debt ratio to GDP was over 100 percent; inflation was in double digits; and investors' confidence had shattered due to inconsistent policies. He said that then the economic team decided to go for major structural reforms.
He said the government introduced fiscal responsibility and debt limitation law for the first time in the history of Pakistan.
According to the Advisor, the law limits government borrowing and spending. He added that now all macro-economic indicators are moving in the positive direction and fiscal deficit has been brought down from 6-7 percent to 3.2 percent. Double-digit inflation has been reduced to single digit; lending interest rates have been reduced considerably; the GDP growth has picked up gradually, and last year it was 8.4 percent.
He said that FDI, which used to be around 350 million dollars a year, reached 1.4 billion dollars this year. Public debt came down to 62 percent of GDP from 100 percent. External debt-to-GDP ratio has also been brought down to 32 percent from 66 percent of GDP. Foreign exchange reserves increased considerably and Pakistan's credit rating improved.
The Advisor said that to sustain a higher growth rate a number of initiatives have been taken by the government for equitable development. He mentioned several programmes, which the government launched for economic development of the country, including Khushal Pakistan Programme (KPP). Community development initiative that provides utilities and services to the people at the grass-roots level has been intensified. He said that Khushal Pakistan Fund (KPF) has been established to provide rural development funding, and the Prime Minister's concept of 'one village one product' has been introduced with the help of ADB. Spending on primary and higher education has been substantially increased.
Regarding requirements of infrastructure, including roads, highways, logistics, mega city development projects, the Adviser asked the ADB to reduce time period for project development and disbursement of funds for projects.
The delegation was given detailed presentations on Pakistan's future requirement of water both for agriculture and drinking as well as power and roads and other development projects.
Dr Ishrat Hussain briefed the delegation about various financial sector reforms.
Dr Hafeez Sheikh informed the visiting team about transparency in privatisation programme of the government and involvement of people in the programmes through offering shares to general public. He said the privatisation proceeds were being used to reduce public debt of Pakistan.
Special Secretary Tanvir Ali Agha said that the government was planning to set up a small group to review and select priority projects for speedy implementation. He asked the ADB team to join this process.
- sajjad_dar2000 - 09-14-2005
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by paki_power</i>
<br />its a wasteful topic as everyone knows that pakistan economy is a s hit.
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acha ji mr indian.....
- paki_power - 09-14-2005
ok...keeping aside everything we know that the country is not growing ( or you can say it is growing at a very small pace) because of its huge defence expenditure. Why to incurr so much on defence when the children are hungry..there is no education and the infrastructure is poor..after all the human resource is the most important resource a country has..so instead on defence exp. the govt should apply more funds on other important things also
- sajjad_dar2000 - 09-14-2005
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by paki_power</i>
<br />ok...keeping aside everything we know that the country is not growing ( or you can say it is growing at a very small pace) because of its huge defence expenditure. Why to incurr so much on defence when the children are hungry..there is no education and the infrastructure is poor..after all the human resource is the most important resource a country has..so instead on defence exp. the govt should apply more funds on other important things also
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Look at your own back, in our country people donât sleep on footpath. Half of your (indian) population born, live and die on footpath.
No more discussion with any Indian
- Yasirkashani - 09-29-2005
It's been sad for the last four decades, Pakistan hasnot been able to get the desired results.
It's really funny if we compare the facts and figure, Germany is having unemployment rate 9.5% while pakistan is showing 7.7%, and there are many developed country which has more than 9% unemployment in official, and there are many other economic indicators where PAkistan is top of the list.!
If we calculate the Inflation it is not 9.3%, it's more than 25%!
in reality,the facts are figures don't tell the true story!
Pakistan has to address few challenges
1 Law and order
2. unemployment
3 poverty
4. unemployment
5 inflation
6. mass level production and increase in competition among organization.
Inflation and unemployment are the major source of poverty. because of low level of law and order, the investors confidence in local and abroad are very very low...without investment a country can't stand firmly. low investment is equal to low level of employment opportunities which brings poverty and inflation together.
there are major causes of inflations from monetary policy to the price determination of private organization. Govt has been unable to tackle those private enterprise who are creating lobbism and mafia, and earned maximum profit through selling the products which contributed inflation alot, there are least competitive environment in daily products like flour, oil , milk etc etc. which automatically monopolistic environment.
Law and order has been poor in the sense there are very few small and medium enterprises because of 25 different inspectors and dozen other law enforcement agencies, these people do nothing, but spoil the confidence of local and foreign investors through undue influence or corruption.! Government needs to bother least the new small and medium business organization to tackle those inspectors!
agriculture productions should be boosted, we need to have greater supply than demand situation, so that the price of products be controlled, hence controlling the inflation and poverty.
Every country is making defence expenditure and every is asking foreign debt, but the point is how far you can make effective policy to draw investment. Effective investment and tax revenue collection policy can make country in better policy.
Unfortunately Pakistan lacked both investment and tax revenue collection!
the equation is simple, no good law and order= no good investment= no good GDP%=no good development=no employment=no production=inflation= tax revenue collection will be tilted towards indirect tax rather than direct tax(indirect tax is burden for consumers making them more miserable and poor)= will increase poverty!====== law and order get more worse becasue of poverty.>>>crime rate go up as well as corruption!
Bye
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