Besides being investor friendly the coming budget
should also be people friendly
From Shamim Ahmed Rizvi,
Islamabad
June 18 - 24, 2001
The Chief Executive Gen. Pervez Musharraf, while
addressing the 8th meeting of Economic Advisory Board, conceded that
his government has not been able to revive the economy or winning
investors confidence. He, however, claimed — and rightly so — that
his government's single most important achievement was winning the
confidence of the international financial institutions like World
Bank, and IMF.
"The soundness of our economic policies has
been endorsed by these institutions and this would certainly help in
bringing turnaround in the economy in the coming years. Economy will
be revived and investment climate will certainly improve", Gen.
Musharraf added.
There can be no two opinions on this issue as not
long ago Pakistan was invariably termed in these institutions as a
'one tranche' country due to the fact that on two occasions during the
previous years of political governments, sanctioned soft-term credit
lines from the IMF were cancelled after the disbursement of only one
tranche under the standing agreements with the Fund. It is true that
without any active relationship with the IMF, that is, continued
financial support to a developing country like Pakistan, foreign
private investment would remain on the sidelines. It is to be seen
whether the renewed relationship of Pakistan with the IMF would also
prove instrumental in attracting foreign private investment which has
so far remained apathetic over the last five years.
Winning over the confidence of international donor
agencies has been possible only because the government has been
following their recommendations faithfully — some say even blindly
— and during the last 18 months has taken many unpopular decisions
which an elected government could not dare to because of adverse
public reaction. Repeated increase in the cost of utilities, large
scale retrenchments and taxing items of daily use, has added to the
miseries of commonmen and adversely affected the popularity graph of
the present government. The people are impassionately waiting for some
relief in the coming budget as has been repeatedly pledged by the
present government.
Assuring a better future for the people of
Pakistan, the Chief Executive described the current lull in investment
activity in important sectors like industry and services as one of the
major problems on the economic front which his government could not
tackle with positive results and exhorted the members of the business
community to come forward with their investment plans in the corporate
sector. He claimed that some friendly countries are coming with heavy
investment in energy, communication, agriculture and infrastructure
sector and that would certainly motivate and encourage other investors
specially the Pakistani expatriates.
As for the major priorities in the policy pursuits
of his government, the Chief Executive has boldly initiated plans to
build medium size dams in different locations of the four provinces of
the country, on which feasibility studies have been completed and
construction work is expected to start in the next financial year. The
important aspect of these projects is stated to be that the initial
investment will be made from the government's own resources but at the
same time funding from friendly countries has also been arranged. This
would undoubtedly go a long way to effectively check the recurrence of
water shortage for the much needed growth in the agriculture sector.
At the same time steps were under way by the provincial governments to
counteract factors responsible for wastage of irrigation water. These
steps would include lining of the canals and widespread guidance for
the use of water with utmost care. It was the water shortage combined
with drought conditions that led to a sharp drop in the economic
growth of the country in the current financial year. With regard to
the process of privatization, which is an important element in the
efforts to promote investment activity in the private sector, the
Chief Executive expressed his confidence that some important public
sector entities like the nationalized commercial banks, financial
institutions and Pakistan Telecommunication Company Limited would be
privatized and handed over to the private investors before long. This
should be welcomed as a positive step implementation of which on
schedule would be keenly awaited by the business community.
General Pervez Musharraf also promised an
investor-friendly budget. The expectations about this budget are
undoubtedly wide-ranging because it would not only unfold new measures
to bring about an effective change for the better in the country's
investment climate, especially in industry and other capital intensive
avenues, but at the same time also unveil plans for actual
implementation of taxation reforms and other fiscal proposals to
enhance the tax yield.
Without a sizeable increase in revenues collection
government cannot initiate any welfare programme for the needy and
poor. Poverty and unemployment are on the increase and needed gigantic
development projects in the public sector. Creation of new jobs for
the unemployed — both educated and uneducated — should be the main
focus of priorities in our future development programme. Besides being
investor friendly the coming budget should also be people friendly.
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