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Jun 19 - 25, 2000

 Economy depicts mixed trend

The performance of the economy during 1999-2000 remained somewhat mixed with 4.5 per cent GDP growth rate and a budget deficit of 6pc, thus making the job of the planners difficult in 2000-2001.

Finance Minister Shaukat Aziz launched the Economic Survey 1999-2000 on Thursday, claiming that signs of "modest turnaround" in the economy were visible. "The budget deficit of 6 per cent (Rs180 billion), achieving economic stability and restoring the confidence of the investors are the major challenges the government is now facing," he conceded.

According to the survey, the GDP grew by 4.5pc as against 3.2pc last year but fell short of the 5pc target. The achievement of 4.5pc growth was mainly attributed to a better performance of the agriculture sector which registered 5.5pc growth.

The overall major crops are estimated to grow by 9.6pc during 1999-2000 as against the target of 5.4pc, which has helped the government have a better growth rate.

The survey conceded that growth in the large-scale manufacturing was almost zero due to 24pc decline in the sugar production. Moreover, the growth estimates of small-scale manufacturing have also been downwardly revised to 5.3pc as against 8.4pc before 1997-98.

It said that large fiscal deficit continued to pose a serious threat to macro-economic stability. External resources to finance fiscal deficit have been brought down from Rsl46 billion in 1998-99 to Rs79.3 billion in 1999-2000. However, domestic borrowing rose from Rs31.6 billion to Rs104 billion which brought up the deficit to 6pc of the GDP.

The domestic debt, as per the revised estimates, has been estimated at Rsl,622.4 billion compared to Rsl,452.7 billion in 1998-99. On average the domestic debt as percentage of GDP has been 44pc during the first seven years of the 90s which rose to 49.3pc during 1997-99. It further went up to 51.1pc in 1999-2000.

43.9 million below poverty line

The proportion of population below the poverty line in Pakistan has spiralled from 17.8 per cent in 1987-88 to 32.6 per cent in 1998-99, states the economic survey for 1999-2000 released on Thursday.

According to the document, the number of people below poverty line has increased from 17.8 million to 43.9 million, signifying an increase of 146 per cent in 11 years.

According to the basic needs approach, the poverty has assumed even graver proportions. It increased from 28.6 per cent in 1986-87 to 35.7 per cent in 1993-94, but at a greater pace in the rural areas than in the urban areas.

Income distribution too has deteriorated, with the Gini coefficient rising from 0.369 in 1984-85 to 0.40 in 1996-97. Another indicator of income inequality is the share of the lowest 20 per cent and the highest 20 per cent of households in the income which increased from 5.5 in 1986-87 to 7.1 in 1996-97, showing the worsening situation of income distribution.

Manufacturing grows at 1.6pc

The manufacturing sector registered a growth rate of only 1.6% during the first nine months of '99-2000 as against 4.7% in the corresponding period of last year.

Giving these figures, the Economic Survey, a pre-budget document of the Finance Ministry which outlines the performance of economic and social sectors for the outgoing year, described the performance of the manufacturing sector as "lacklustre" .

The state of manufacturing sector, which accounts for 17% of the Gross Domestic Product, typically reflects the general economic recession characterised by the lowest inflation rate (3.44%) in Pakistan's history due obviously to the sluggishness of demand. Nevertheless, Finance Minister Shaukat Aziz tried to give a monetarist explanation for it.

After growing at the rate of 8.2% in '80s, large-scale manufacturing slowed to an average of 4.7% in the first half and further to 2.5% in the second half of '90s.

Revival of seven units approved

The Committee for revival of sick units has approved the revival of seven such industrial units at its Wednesday's meeting.

Chairman of Committee Tariq Hameed said after the meeting that 14 units were taken up by the committee which approved the revival of seven units, deferred decision on five units while rejected two.

Hameed said among approved units, three are textile mills, other three included paper and board units while one is chemical factory.

He said two of them were selected from previous deferred list while five from the new one.

Rohri Cement bids

Privatization Commission will auction Associated Cement Rohri Ltd through an open bidding process on July 15, a press release said.

Information Memorandum containing details about plant, machinery, land and other assets being offered will be available from June 22 on payment of Rs300.


Serena diesel pick up, produced by China Gold Ox, has been launched and is on display at a showroom of A.S. Group, says a press release. The pick up with 1,800cc engine can sustain three ton load and can accommodate 16 persons.

Industry to be shifted on gas

The government has decided to shift the furnace oil fired industry on gas within coming two years.

Petroleum Ministry sources told that Chief Executive General Pervez Musharraf has directed the ministry to prepare feasibility report for shifting all industry including IPPs on gas and reducing the POL import to two third within coming two years.

The decision has been taken with a view that Pakistan has substantial gas reserves and after the development of recent seven gas discoveries, gas reserves would be doubled.

5pc more value addition achieved

The eight state-owned enterprises (SOEs) under production wing of the industries ministry produced value-addition at factor cost to the tune of Rs 10.7 billion during 1998-99 which was 5 per cent more than in the previous year, according to the annual report of the Experts Advisory Cell made available.