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.
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
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
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.
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.