June 02  - 08, 2003 

The preparation of the budget 2003-04 which is to be presented, before the National Assembly on June 7 is in the final stages. This will be the first budget presented before the elected House after a lapse of 3 years. The Finance Minister, instead of TV audience will be facing a highly charged house comprising of over 300 elected representatives of the people of Pakistan who will like to avail this opportunity to review critically the performance of the economy during the last 3 years highlighting both its achievements and its failures.

During the last 2/3 weeks the Finance Minister has participated in various pre-budget seminars organized by different organizations including the leading national newspapers. Shaukat Aziz discussed various aspects of the economy, claiming unambiguously that the country has progressed from a begging-bowl culture towards economy of self-sufficiency in a matter of few years. Now it is up to the political leaders to determine the economic destiny of the country he said, implying that continuity in the implementation of reform measures would strengthen the economy further while reversal of the process would wipe out the gains achieved so far. If the present policies are continued, the country could be in a position to join the category of 'Asian tigers' before long.

The authorities have already entered into a serious dialogue with the IMF for earlier retirement of its loans. Hopefully, the country would no more require finance assistance from the IMF for balance of payments support from next year, the Finance Minister claimed.

Shaukat Aziz was somewhat more forceful in highlighting certain achievements and outlining the future strategy at the pre-budget seminars. In his presidential address at one of such functions he reiterated that GDP was up, per capita income had increased, current account was in surplus and foreign debt was reduced in the last three years. All economic data released by the present government was verifiable. Past governments did not include foreign government debts and swaps in the outstanding level of debt. The omission has been rectified now. All the budgetary targets would be met this year. The government would concentrate on four areas in the next budget that would address poverty. The main focus would be on GDP growth acceleration which would decrease poverty and increase employment opportunities. Next focus would be on construction industry, which is labour-intensive and would also support a large number of downstream industries. Next priority would be development of large-scale manufacturing and SMEs. Measures would be incorporated in the next budget to ensure availability of credit to the businessmen at low rates. Efforts would also be made to remove irritants faced by the entrepreneurs like unnecessary inspections of factories or business premises by different inspecting agencies.

Addressing another seminar the Finance Minister predicted 6 per cent economic growth, per capita income at $625 and poverty level at 23 per cent from the present 32 per cent during the next five years. He presented the salient feature of the economic vision for future which put investment at 18 per cent of the GDP, against the current 15 per cent; 5 per cent inflation rate; deficit at 3 per cent, development expenditures 4 per cent of the GDP; and public debt 75 per cent against the present 90 per cent of the GDP.

He expected a revenue generation target of Rs.510 billion for the fiscal year 2003-04 with exports at about $11.5 billion and an all time high amount of Rs.161 billion on social sector uplift programme. He maintained that the forthcoming budget will be tax-free, pro-growth and pro-poor budget aimed at reduction in unemployment and poverty.

Highlighting the achievement made in the current fiscal year, the Minister said that manufacturing sector showed a 10 per cent growth during the first nine-month in which the textile and engineering sectors made the most progress. There exists much potential for the growth of engineering sector, which should be exploited for the betterment of the country, he asserted. He said that small and medium enterprises (SMEs) in Gujranwala, Gujrat and Sialkot have made tremendous progress and now they are in a position to compete with anyone in the world, and the government will pay special attention of SMEs for its further growth. He disclosed that export of indigenous fans and auto-parts has significantly increased in the last few years.

"We should shun the begging-bowl culture in the interest of the country's economic sovereignty, combining the Pakistan's strategic location, 140 million human resources and an abundance of natural resources, the country has a huge potential to achieve economic growth and prosperity", he said.

The local currency versus the US dollar is presently being appreciated, Shaukat said and added that had the government not intervened the rate of the greenback would have declined and subsequently it would have hampered our exports.

The Minister maintained that the government is planning to remove irritants in order to provide a conductive environment for investment. Over the years, the government has been slashing the rate of Central Excise Duty (CED), while CED was removed on five items last year and this year more items would be exempted from CED. "If our economy continues to stay on the present track, we would soon achieve economic prosperity."

A number of economists and financial analysts including two former finance and commerce ministers of Nawaz Sharif's regime namely Sartaj Aziz and Senator Ishaq Dar, however, did not agree with the Finance Minister saying that the picture is not as rosy as being painted. According to then unemployment has increased to an alarming proportion, poverty is on the rise and inflation figure quoted by the Finance Minister are misleading which nobody believes. The facts and figures offered by the present government may be source of satisfaction for IMF and the World Bank but certainly not for the people of Pakistan, they maintained.