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1- TURKMENISTAN GAS
2-
AUTO INDUSTRY
3-
GROWING TRADE WITH AFGHANISTAN
4- REGIONAL ECONOMIC TREND
5- FREE TRADE AGREEMENT
6- COAL IN CEMENT INDUSTRY

 

REGIONAL ECONOMIC TREND

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From SHAMIM AHMED RIZVI,
 Islamabad

Jan 26 - Feb 01, 2004
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The 3-day annual conference of Pakistan Society of Development Economists (PSDE) organized by the Pakistan Institute of Development Economics (PIDE) in Islamabad last week provided an international forum to discuss the regional economic trends with special reference to Pakistan. Focusing attention on "an institutional change, growth and poverty" over two dozen leading economists, both from Pakistan and outside, enlightened a sizable gathering of economist, economic writers, social scientist and intellectuals on the problems being faced by the region and conditions prevailing in Pakistan the economic front.

Inaugurating the conference held on the occasion of 19th annual general meeting of the PSDE, the Finance Minister, Shaukat Aziz said that the economic reforms during the last 4 years had significantly improved macro economic environment and our future reforms include strengthening of institutions, improving industrial competitiveness building a robust economic system and ensuring transparency in economic policies. The Finance Minister noted the opportune timing of the conference, as, according to him, western economies were re-emerging from their fragile growth which would benefit the developing countries. In the region too signs of peace and stability after SAARC might benefit the economics of South Asia.

He said that the institutional change, growth and poverty were interlinked. Good governance was key to enhancing productivity levels, income distribution and delivery of social services. But it depends on the institutions which had deteriorated in the past and presently are being rebuilt on sound footings. Sustained growth was absolutely important for reducing poverty. Focus should be on pro-poor growth i.e sectors which benefit the poor should be given priority in the development programme. The Minister dealt at length on the multi-sectoral economic reforms perused by the government diligently which enable the government to face the serious challenges on the economic front. The Finance Minister claimed that Pakistan today had strong macro economic indicators and is poised for an economic revival. Reduction indebts, poverty and unemployment were the priority items of the future agenda. A key objective is to reduce poverty and unemployment through private sector investment. He mentioned that the government had identified five major drivers of growth having the potential to generate pro-poor growth and create employment opportunities. These include agriculture, housing and construction, SMES, oil and gas and information technology.

The conference was also addressed by Minister for Privatization, Dr. Abdul Hafeez Shaikh and Minister for Labour and Manpower besides the President Pakistan Institute of Development economic Dr. A.R. Kemal and many other economist representing renowned institutions of international fame who gave various suggestions as how to bring about a positive change in the lives of the people by reducing poverty level. The Minister for Privatization was of the view that a larger position of privatization proceeds (then the 10 percent presently earmarked) should be allocated for pro-poor spending while the Minister for Labour reiterated government resolve to check and reduce poverty by creating more jobs on Labour extensive projects. He told audience that over 100,000 workers will be sent abroad annually for skilled and semi-skilled jobs.

 

 

An enlightening lecture was delivered by Director Policy Planning and Employment Sector at International Labour Organization in Geneva, Rashid Amjad on "solving Pakistan's Poverty Puzzle: Whom should we believe? What should we do" He attributed the rising poverty and slow economic growth especially during 1990s to various factors. Although Pakistan witnessed an average four percent growth in agriculture production, the poverty levels significantly increased. Major factors which contributed to increasing poverty pressures in 1990s was slowing down of economic growth due to large fluctuation and decline in cotton production, slow down in remittances inflows, bad weather conditions, economic sanction in 1998, economic uncertainty due to frequent changes in governments. He also made many policy recommendations for alleviating poverty, generating employment and sustainable development in Pakistan.

Professor of Economics at the University of New South Wales Sydney Nanak Kakwani presented his paper on "Pro-Poor Growth: Concepts and Measurement. He said that the issue of economic growth is important because without growth no nation can counter poverty. "So we should concentrate on how to generate growth and what should be done in addition to growth to reduce poverty. However, any strategy to counter poverty should keep the growth at the core position." In all 11 papers were presented and discussed in the regular sessions. These research papers covered various issues such as Madar-e-Millat and Women's Awakening, Debt and Public Expenditure, Institutional Strengthening and poverty reduction and economic growth.

It is conceded that the Finance Minister is not wide of the mark when he claims that the macro economic indicators have improved during the past four years. Also one cannot disagree with him when he says that good governance is the key to enhancing productivity levels, income distribution and delivery of social services- the area where we have been found wonting in the past. However to take up the theme of the PIDE conference, the matrix of institutional change, growth and poverty alleviation requires as the main component adequate investment in building modern infrastructure before the future reform agenda can succeed in building a robust economy as envisioned by him. This is an area which is not an alternative for foreign or private domestic investment. Without an improvement in this area all the good work done in the macro management of economy to achieve stability may not be able to deliver the desired good of minimum 6 percent growth every year which is considered essential to reduce poverty.