Sindh, a province with enormous economic potentials
has always been suffering from financial constraints obviously due to
excessive politicization and mismanagement of the available resources in
Despite having a strong agriculture base in the
countryside which, is strongly supported by the industrial and
commercial capital at Karachi, unfortunately the economy of the province
was never got up on strong footings.
Sindh has an edge over other provinces of the country
in many respects including higher literacy rate, rich in human and
natural resources, leading in production of natural gas and other
petroleum products, its strategic location of international exposure by
virtue of two sea ports and an international airport.
The province has another advantage of providing a
business outlet to the industrial products produced in other parts of
the country, which greatly help in boosting its revenue contributions to
the exchequer. The province has another distinctive feature of providing
job opportunities to the people from all over the country.
It is however unfortunate that instead of becoming
the richest province of the country, the people at the helm of affairs
in the past due to their quest for personal gains relegated the province
to a situation where it has to survive on debts and Over Drafts of the
State Bank of Pakistan and other loans from the federal government which
also affected the living standard of the population of the province.
Apart from inefficiency in the planning for
prosperity of the province, the political disturbances leading to
widespread law and order situation in the province also adversely
affected the economy of this province during the last decade. Besides
severely disturbing the economic growth of the province, the persistent
law and order situation played havoc to the social life including
destroying the growth of education at the desired level.
The situation seems to have taken a turn around and
there are signals for making things bright. It is for the first time
during last 11 years that the province of Sindh has become free from all
sorts of debt. Although the resources are the same but it is the
professional management of the resources which has made all the
difference. Due to better management and strong economic policies of the
province, not only the international donor agencies have shown their
interest in the development programme of the province but a number of
foreign investors are also showing interest to enter into collaboration
with the provincial government for various development programmes
initiated by the provincial government.
This financial stability obviously is the result of
professional management of resources and reforms in tax structure,
strict discipline on lavish pubic expenditures.
The province of Sindh is fortunate to have a dynamic
professional for its financial management in the form of Dr. Hafeez
Sheikh. Dr. Hafeez, who is the provincial minister for finance says that
with all reform measures Sindh has been undertaking in the financial and
social sectors, it was possible to attract the interest of the World
Sindh, he said is committed to education, economic
revival through streamlining development portfolio. Dr Hafeez rightly
takes pride when he says that it is in recognition of these efforts that
for the first time in the history of Pakistan the World Bank has evolved
a special 3-year programme with the government of Sindh earmarking $100
million each year.
This financial assistance from the World Bank will be
interest free loan at just 0.75 per cent service charges, which is
certainly a highly soft term financing. This loan is to be repaid in 35
years, with a 10-year grace period. The province will focus on
continuing with its reform programmes through this loan.
Though the support provided by the World Bank is
appreciable, yet we would have to pursue this agenda even if they had
not come forward in the interest of the people.
Basically, this reform programme is based on four
parts. The first, there is financial management and discipline, second
private sector development, third good governance and fourth and the
last social sector service delivery.
Integrated into this programme are our own benchmark
and a medium-term framework. We are trying to ensure this money is spent
in way whereby gains can be consolidated and which accrue over longer
period of time so that even if subsequent governments were inclined to
squandering it, they would not be able to do so. Out of 100 million
dollars, the provincial government used Rs2 billion to retire expensive
government loans (with 17.7 per cent interest charged on it) by doing
that we have saved some Rs400 million per year paid as debt servicing.
Some of the money is used to create Rs1.2 billion-pension fund. The
provincial government had not doing so far years and that is unwise
financial management. Endowment fund worth Rs1 billion has been created
for financing higher education for poor students at good universities in
We want to finance them to get kind of education that
will allow them to get integrated into the international economy.