To make good use of leisure is said to be one of the
most difficult things in the life of an individual or the nation.
Relatively speaking, for the first time the economy
of Pakistan has come to a leisure, but not any sort of complacency to
avoid recurrence of financial nightmare of the past where the country
had reached at the brink of default. The economic situation is
satisfactory as far as economic fundamentals are concerned. The foreign
exchange reserves are likely to cross the mark of $10 billion at the end
of the current financial year. The exports are equally improved and
expected to even cross the target. Cash inflow from external resources
is outstandingly improving especially the workers remittances and the
stock market is also performing extremely well. These all indicators
seem to have brought a feeling of leisure for the economic managers of
the country who according to reports are planning to invest 10 per cent
of its foreign exchange reserves through international investment banks.
Of course the economic managers planning to make good use of the
available resources, however there are some extremely important areas
within the country which need the immediate attention of the people at
the helm of affairs. Without any fear of contradiction, the best area of
investment which repays more than any other sector is the investment in
human resource development which is unfortunately a neglected area in
case of Pakistan. The education sector in Pakistan has been allowed to
drift towards a situation where it will be beyond reach even of the
middle income group what to speak of the poor due to money minting trend
in this sector. Situation demands for immediate and effective measures
so that the quality education is made available to the common man at an
affordable price. Investing in a bank is of course good but investing in
human resource development through better education will surely repay
much more in the long run than investing in an international investment
Currently, according to a report, the Governor State
Bank of Pakistan has said that we are going to hire an international
consultant company to advice and screen some of the international
Pakistan's foreign exchange reserves have raised to
record high of $9.349 billion at the end of December 2002 while its
total foreign exchange reserves are set to cross the $10 billion mark by
the end of the current financial year.
It is the strong reserves position that had enabled
Pakistan to plan the investment move for the first time, said Dr. Ishrat
Husain, the governor SBP.
The central bank did not have in-house capacity to
manage the reserves. It is for the first time we have a surplus, but the
central bank has to be very cautious and conservative that it did not
expose itself to any risk.
Dr. Ishrat Husain also said that the country was
likely to hit six per cent economic growth by fiscal 2004-05, he also
has asked the new civilian government to stick to reforms initiated in
Country was also in the process of building up its
reserves of essential food and fuel in case there was war in Iraq.
Pakistan aims to achieve 4.5 or 4.6 per cent economic growth in the
current financial year and for the next fiscal year hopes to exceed five
per cent growth. Dr. Ishrat said the new civilian government should
remain committed to the economic reforms initiated three years ago under
military rule by President Pervez Musharraf. The government should keep
an eye on fiscal discipline, fiscal deficit to avoid falling in the debt
trap once again. All the unpopular decisions were taken by the military
government. Now it is time to reap the dividends from those decisions.
Former military government won praise from global
donor agencies including the IMF for meeting stringent conditions,
including broadening the tax base, withdrawing subsidies and increasing
utility charges. The decisions met through resistance from traders, the
business community and the general public.
About three years back the economy of Pakistan was in
deep crisis to such an extent that it had reached at the brink of
default on repayments of its foreign debt. All the macroeconomic
indicators were moving downwards. The military government brought the
economy out of crisis and gave it stability.
People generally expect from the new leadership to
give relief to the poor, but it should not be done at the expense of
reforms. In Pakistan when we were experiencing a six per cent GDP growth
rate, poverty declined to three to four per cent whereas it surged to 34
and 35 per cent. One can see a clear correlation between the growth and
Economic analysis say about one third of Pakistan's
140 million people live in poverty. But the government calls the figures
Now the civilian government should continue with the
devolution process and continue investing in agriculture, small and
medium sized enterprises and irrigation. It should also promote
information technology and invest in the oil and gas sector to spur
growth and employment. But most importantly, it should keep an eye on
fiscal discipline and fiscal deficit which is very critical and speed up
reforms and restructuring of state-run utilities. If we don't do that we
can get back in the debt trap.