Second generation reforms


Mar 14 - 20, 2005



Besides meeting many foreign dignitaries including Senior Vice President of the World Bank, German and British investors and a NATO delegation, Prime Minister, Shaukat Aziz had a very tight scheduled last week. He visited Azad Kashmir and District Attock; one of these two constituencies from he had elected as the member of the National Assembly prior to his elections the Prime Minister of the country.

Presiding over the NEC meeting to consider the 5 years (2005-10) Development program, a symposium on health issues, laying the foundation stone of newly inaugurated tower of Islamabad Stock Exchange were some of the important functions he attended during the week.

During the course of NEC meeting, the Prime Minister emphasized that the country must move forward into a double-digit growth to seize new opportunities with the success of the economic reforms of five years. He was firm in his assessment that the country was striving towards the target of 8 percent growth by 2009-10 or earlier.

Expecting a high growth scenario, the Prime Minister said that the targets of GDP growth for the year would be exceeded. Currently we are heading towards 7 percent growth instead of 6.6 percent because the targets in agriculture, large-scale manufacturing and services sectors would be surpassed.

Shaukat Aziz also claimed that unemployment has declined for the first time since 1993 and that the trend of rising poverty has been stalled. He expressed the hope that the proposed Medium Term Development Framework (2009-10) would help reducing poverty by 20 percent in the country.

He identified that Civil services, police, judiciary and devolution of power would be the key areas for achieving the desired level of good governance. In the face of emerging WTO challenges, we need to focus on reducing the cost of doing business in Pakistan, especially in areas such as government regulations, tax distortions, efficiency of public utilities and removal of bottlenecks especially in the infrastructure development.

Addressing the business community after performing foundation stone laying ceremony of 19 storied Islamabad Stock Exchange tower; Prime Minister observed that the stock exchanges should consolidate the organizational structure and is well tuned in implementation of capital market reforms. This he said was important to attract foreign and local investors, especially the retail investors to play their role in expansion of the capital formation.

There is a need for enlisting more companies on the stock exchanges, and the government was pursuing the privatization program through efforts to reinforce capital market base in Pakistan. The reforms in the capital market would increase retail investment, "as we do not need trading halls in future", which would be replaced with the computerized trading of stocks. In the next phase, stock exchanges need electronic trading facility for both retail and major investors, he observed.

He said that the government and SECP have jointly worked hard to bring capital market reforms during the last five years. Despite resistance, the reforms have shown remarkable results "and we have to move forward in view of changing international market dynamics. He said: "Time has come to put forward the demutualization of all three stock exchanges. The concept of demutualization is very necessary for the improvement of stock exchanges. Whenever we go through reforms, we have to make changes, keeping in view global trends. The government has started second-generation reforms in different areas of the country. He said the government has opened door of opportunities for both domestic and private investors, and private sector should take advantage of these opportunities. Presently, every major industry in Pakistan is ready for expansion or is expanding taking advantage of economic growth in the country.



The Prime Minister said that the government's commitment for implementation of reforms has visibly improved three major area i.e. political, economic and diplomatic fronts. The situation on the political front is improving while the consistency in policies producing positive economic results. The micro economic environment has also started attracting foreign investment. Today, Pakistan is considered to be a responsible country particularly in relationship with neighboring countries on the diplomatic front, he pointed out.

During his visit to the rain-affected areas around the Neelam Valley in AJK the PM announced that a relief package was in the pipeline to help the rain and heavy snowfall hit people.

Taking to World Bank Senior Vice President, Shaukat Aziz underlined the importance of the World Bank's continued support to the country for implementing its second-generation reforms. He also called for World Bank's investment in sector like infrastructure development, water resources and energy sector development to further accelerate the pace of development.

In his separate meetings with British and German investors, the Prime Minister offered them to invest in power and energy sector, which promised lucrative returns. He said that demand for power and energy is increasing in Pakistan as economic activities are picking up all over the country. Currently the country's economy is on high growth trajectory and there is a need to ensure uninterrupted power supply for its future needs to realize its true potential".

Speaking at the inauguration ceremony of IT village - the software technology Park in Lahore. Prime Minister Shaukat Aziz urged the private sector to invest in information technology industry to benefit from the opportunities of this fast growing field. Pakistan could attain high growth levels by investing in non-traditional sectors like information technology, in addition to the traditional ones. The government, he said, had taken many steps over the last several years to provide an enabling environment to information technology sector.