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May 07 - 13, 2001

Minister outlines economic strategy

Finance Minister Shaukat Aziz told a forum on Pakistan at the Georgetown University on Monday that reinvigorating growth, restoring macroeconomic stability, reducing poverty, and improving governance will be the central pillars of the government's economic strategy.

In a keynote address he gave a rundown of the dire situation found by the incoming government in October 1999, said the rot had been halted, a process of renewal and recovery was well underway and making impressive progress. He called the 1990s as Pakistan's lost decade when the country had lurched from crisis to crisis.

He said Pakistan's economic problems were structural in nature but no serious attempt was made to address them. Pakistan's credibility with the donor community had suffered and the poor state of governance had reduced the effectiveness of public expenditures and contributed to high levels of corruption. There was a lack of transparency in decision-making and there was misrepresentation of fiscal data to international agencies. This process of decay had been arrested.

The present government has succeeded in restoring Pakistan's relations with international financial institutions and resolved outstanding issues involving international power companies, including the Hubco issue, the minister recalled. Shaukat said an initial attempt was made in 2000 to arrest the declining trend in economic growth. There was a modest recovery in agriculture but it was not likely to be sustained in the current fiscal year because of a protracted drought.

Over the medium term, he predicted, economic growth would remain constrained because of balance of payments difficulties. The real challenge was how to step up growth from four per cent to 5.5 per cent. The second most important challenge, the minister said, was the rise in poverty and human deprivation. Overseas remittances had fallen. Growth, accompanied by macroeconomic stability offered the best hope for poverty reduction.

Rs 15 billion Makran project okayed

The Executive Committee of National Economic Council approved on Thursday Rs15 billion Makran Coastal Road construction project. The ECNEC which met here under the chairmanship of Finance Minister Shaukat Aziz, considered a number of projects placed on its agenda.

The Makran Coastal Road project was approved in phases for which it also agreed to seek foreign assistance. Ecnec also accorded its approval to two information technology projects, including the NTC Multi-Services Data Network at a cost of Rs289 million and directed the sponsors to also consider bank financing for this project.

The second IT projects of Virtual University was also approved in principle. The ECNEC asked the sponsors to reduce cost in consultation with the Planning Commission and adopt a modular approach to minimize charges to the prospective students of this university which will be first of its kind in Pakistan.

Water project

The National Electric Power Regulatory Authority would not allow development of water resources and hydel projects from the profit of electricity sales by Wapda, a Nepra official told.

Sources said that the power wing of Wapda had already been corporatized into 12 independent companies run by the board of directors under the 1984 Companies Ordinance. The accounts and assets of these companies were in the final stages of formal segregation and would be privatized ultimately.

Hydropower development plan

Notwithstanding some slip-pages in the power sector reforms, the World Bank is willing to support $45 billion Water Resources and Hydropower Development programme "Vision-2025."

"The World Bank has indicated its willingness to support WAPDA's vision-2025 programme," said Munawwar Basir Ahmad, the Chief Executive Officer (CEO) of Private Electric Power Company (PEPCO), in a letter to secretary water and power quoting his recent meetings with the bank officials. PEPCO is an umbrella organization of WAPDA's 12 corporate companies.

He said hydel and water resources development planned under the Vision-2025 programme was expected to provide a "jump-start" to the national economy. Official sources said the bank however expected counterpart financing arrangements from the government and WAPDA which was being pursued through seeking assistance from friendly countries like China, UAE and Saudi Arabia.

Mangla dam height to be raised: CE

The chief executive, Gen Pervez Musharraf, said on Saturday that the raising of Mangla Dam's height by 40 feet is on "top of agenda". Raising the height of Mangla Dam will increase the storage capacity by 3.5 million acre feet (MAF), which will cover the depletion of capacity in both Mangla and Tarbela dams because of sedimentation, Gen Musharraf said in his speech at the concluding session of the first Agri-Business conference.

The government, he said, has decided to construct Gomal Dam in NWFP, Hingol and Mirani dams in Balochistan, Thal reservoir in Punjab and Kachhi and Ranni canals in Sindh.

Allocation of 5% GDP to farm sector

The first agri-business conference has called for allocation of 5 per cent of GDP in the agriculture sector of the country. The concluding session of the conference presided over by the Chief Executive Gen. Pervez Musharraf presented a set of recommendation formulated deliberation by 150 participants over the last three days.

The recommendation read out by Commerce Minister Razzak Dawood asked the government that the major thrust of the next budget should be on the agriculture sector.

Chemical industry

An intense battle of conflicting interests that engages a big segment of chemical industry with giant multinationals on the either side took an altogether new turn when government appointed one of the principal players in this dispute, a judge to decide the issue.