Reviewing the Economic progress during the first year
of elected government, the Finance Minister, Shaukat Aziz claimed that
the country's economy has made considerable progress during the last one
Explaining the salient features of economic
performance during this period, Finance Minister said that one year
growth figures bode well for surpassing 5.5 percent GDP growth rate in
2003 against target if 5.1 percent. "We may touch 6 percent growth
rate during the current financial year ending June 2004", he added.
He claimed that the inflation rate is under control
and country's foreign exchange reserves are touching an all time high
figure of $ 12 million. The government has been controlling the
expenditure side to save and divert the same resources for development
program. The IMF Poverty Reduction and growth facility program is going
to expire soon and government has indicated to the fund that it was not
interested in further extension as the loans under this program carry a
higher rate of interest. The Finance Minister said that the Economic
reform agenda of General Pervez Musharraf is continuing uninterrupted.
The government is facing no resistance from any side as the results of
these reforms obvious and encouraging. These reforms have provided the
base strength to the country's economy enabling us to refuse foreign
loans, he added.
The Finance Minister claimed that during the first
quarters of the current fiscal all target set earlier have been
surpassed. Revenue collection is up by about 9 percent exports by about
12 percent and import by about 10 percent. Recent exhortation in large
scale manufacturing sector and exported growth in agriculture sector
gave confidence to the policy makers to declare that in the next 2 years
6 percent GDP growth rate will be achieved. The Minister compared the
performance of Key Economic indicators on three counts, one of the last
fiscal year 2002-2003, the present government's one year and first
smooth of the current fiscal to prove his point. Higher growth is
achievable because of excellent performance of industrial sector and
improved water supply for irrigation which would improve agriculture
sector's growth, he said adding that availability of consumer financing
has generated a strong consumer demand and this indicated the emergence
of a strong middle class in the country.
Continuing the Finance Minister said that if we
succeed in attaining 6 per GDP growth rate by June 2004 and sustain it
for 2/3 years more, it would definitely lead to poverty reduction.
Admitting that so far there has been no visible fall in the poverty
level, Shaukat Aziz said that it will be possible only after few years
sustained growth rate of 6 percent and above. He said that with
increased government spending through Public Sector Development
Programme (PSDP) to Rs. 160 billion this year against 136 last year will
create more jobs and help in reducing poverty. He said that 60 percent
of PSDP this year would be spent on infrastructure that include Roads,
Water and Power, 21 percent for social sectors with focus on other
sectors. The Government will keep construction on top priority as it is
labour intensive and create more job.
Responding to the questions by the newsmen, the
Minister also admitted that direct foreign investment and remittance
have also declined but he hoped to make up the losses during the
remaining six months of the current fiscal.
It was perhaps a moment of truth for Finance
Minister, when he maintained that Pakistan could not overcome the
challenges of poverty reduction, increase in investment level and
creation of employment opportunities despite macroeconomic stability.
This is the first time that such an important government official has
publicly accepted the government failure in its well-pronounced goals at
the conclusion of one-year of the Jamali-led government are extension of
the earlier policies, it can be inferred safely that while the last four
years saw considerable improvement in the macroeconomic stability of the
government, they fell short of seeing any tangible improvement at the
popular level. It is in fact a failure in the achievement of the
ultimate goal as the rational for all economic changes in the final
analysis is the well being of the people at large.
In spite of strong rationale for tackling poverty
through direct programmes, a closer look would reveal that the lack of
investment, as all other programmes of tackling poverty through direct
programmes will remain limited in domain and can hardly encompass all
the impoverished people of the country. It is, therefore, prudent that
facilitation of domestic and foreign investment in the country should
remain pivotal to economic decision making in the country. As the
private domestic and foreign investors feel shy, it is high time that
the government should take the lead and bring about significant increase
in its development expenditure. The housing sector has rightly been
classified as an area of investment and the policies should continue in
future as well. Once the effects of government policies started yielding
results, the level of investment by private sector will rise as well and
hence the unemployment and poverty could be tackled.