November 4, 2001	Sunday	Shaba’an 17, 1422

KARACHI, Nov 3: Pakistan’s growth target of 4 per cent in the current fiscal year looks hard to achieve, as development programmes, both at the federal and the provincial levels, are coming under severe resource strain.

Economists and financial analysts predict poverty ratio is bound to increase to alarming levels during the current fiscal year. Mounting pressure on the already depleting infrastructure facilities, shortage of river water, a slowdown in economic activities and influx of refugees from Afghanistan are bound to aggravate the economic situation.

“Let us wait for next two weeks,” a leading practising economist in the city said. He said everything now relies on Pakistan’s new found friends in the West whether they offer the promised assistance or not.

Officials in Sindh government and in Balochistan government dropped broad hints of annual development programmes coming under ‘hard look’ if the cash flow position do not show any improvement.

Sindh is reported to have suffered a cut of over Rs4 billion from its shares in federal funds and Balochistan by more than Rs2 billion during last four months. The two provinces suffer perpetual resource scarcity problems for last several years and are taking up very modest development programmes.

A report related to IMF’s inability to offer two billion dollars poverty reduction and growth facility assistance on Saturday has not amused many economists and financial analysts in the city.

“A bad omen” a senior official in the Sindh government remarked. He, however, hoped that a clear picture on resource flow in coming months will emerge in the next few weeks.

In the last fiscal year, Pakistan showed a growth of 2.55 per cent with negative 2.5 per cent in agriculture. “Long spell of drought” was blamed for dismal agricultural performance. But manufacturing contributed significantly in the last fiscal year.

This year the September 11 incident at New York and Washington and the subsequent launching of the US air raids on Afghanistan since October 7 are the ‘convenient excuses’ for retarded growth.

Team of Pakistan’s financial managers expressed all determination to make a turnaround this year and set a growth target of 4 per cent for 01-02 year. Agriculture is expected to show growth of 2 per cent, which in overall should be 4.5 per cent to 5 per cent growth taking into account minus 2.5 growth in 00- 01 year. Large scale manufacturing is expected to maintain a growth of 6.5 per cent as against 8 per cent plus last fiscal. Other sectors including services is expected to contribute 4.1 per cent in the current fiscal year.

A medium term budgetary framework of three years was also launched simultaneously with the budget in June last. This framework was designed to improve growth to 4.7 per cent in 02-03 and eventually to 5 per cent in 03-04.

Also a long-term 10 years perspective plan was launched to push the country’s growth rate to 6 per cent plus, strike a surplus balance in the current account and contain the budgetary deficit to less than 4 per cent and provide enough resources for the development.

In last ten years that include last two years when the present team of financial managers took over, development funds are the first casualty when it comes to resource strain.

A modest development programme of Rs130 billion was prepared for the current fiscal year. On August 14 the government launched mega projects in infrastructure in all the four provinces.

No official announcement has been made about the ADP and the projects launched on August 14, but officials in Karachi and Quetta are skeptical about any headway in that direction.

Tax collection during July to August this year were already behind the proportionate target of Rs457.7 billion, and September 11 incident at New York and Washington and launching of the US air raids on Afghanistan since October 7 has given a severe setback to economic recovery efforts.

Latest revenue collection figures reveal a shortfall of Rs12 billion plus in last four months. This shortfall has affected the resource distribution among the provinces.