November 12, 2002	Tuesday	Ramazan 6, 1423

Please Visit our Sponsor (Ads open in separate window)

ISLAMABAD, Nov 11: Pakistan has assured the International Monetary Fund the continuation of policies, and contracts made with bilateral donors and International Financial Institutions by the future civilian government.

Official sources told Dawn that the visiting head of IMF mission, Klaus Enders, who met here on Monday Minister for Finance, Shaukat Aziz, was told that President Pervez Musharraf will himself ensure that his economic and financial policies were not reversed.

Aziz said that continuation of the existing policies were very important for macro-economic stability and that the government will not compromise on it.

Sources said that Mr Enders on this occasion pointed out that Pakistan had faced three major challenges in recent times which included external shocks in the wake of Sept 11 attack on America, drought, and tension with India. He said, despite these problems, Pakistan was likely to achieve 4.5 per cent GDP growth during the current financial year.

Sources said that the head of the IMF mission also referred to Argentina and said that this South American country faced unprecedented economic problems because of not ensuring continuity of reforms.

He also said President Musharraf’s has successfully managed inflation and spent considerable funds on poverty alleviation.

Sources said that he assured the finance minister that in case Pakistan continued its reform agenda, the IMF and other international lenders will remain committed to offer uninterrupted assistance to the future elected government.

According to a statement issued by the ministry of finance, Mr Enders noted with satisfaction that Pakistan as a result of financial and structural reforms has achieved macro-economic stability which would lead to higher economic growth and attract direct foreign investment and reduce poverty.

He is currently leading a six-member review mission to assess Pakistan economic performance for the first quarter in a meeting with the finance minister.

He further said that the IMF board of directors in its recent meeting had commended Pakistan’s Poverty Reduction and Growth Facility (PRGF) programme and higher allocations in the Public Sector Development Programme (PSDP) which would generate economic activity, achieve higher growth targets, increase spending in social sector especially health, education and human resources development to create and increase skill development for generating jobs and reduce poverty in a holistic manner.

During the meeting they also reviewed challenges such as job creation, quality of utility services and performance of public sector corporations. Another issue deliberated upon was smooth transition and continuity of reforms to achieve continued better results during the next government tenure.

Earlier, Finance Minister, Shaukat Aziz, giving a brief review of economic performance during the first quarter said that Pakistan’s revenue collection is on track and may exceed the target, trade was robust, non-food and non-oil imports increased, indicating more investment in the textile sector which in turn would generate jobs and pick up economic activity.

On domestic side, of particular significance was increase in machinery imports in textile sector, performance of automobile, engineering and agriculture sector was healthy. Gross foreign exchange reserves crossed over $8.6 billion and remittances by overseas Pakistanis have touched $1.05 billion during the quarter. If the trend continues, the foreign exchange remittances are expected to cross $3 billion mark during the current financial year.

These economic indicators, the finance minister, said have made Pakistan to attain economic sovereignty and would lead to a higher economic growth, which in turn would generate jobs, create industrial activity, and increase exports.

Aziz further said that textile industry has indicated that the textile sector may invest from $5 to 7 billion in the next five years to upgrade the industry to meet the demands of international quality conscious customers and to increase Pakistan’s textile exports.

He said that the increased public sector development programme has played a complimentary role in developing an infrastructure to enable the private sector to increase its activity and productivity. He said that cement industry was close to achieving 70 per cent utilization and steel consumption was up by eight per cent.

The finance minister said that Pakistan’s macro-economic stability and transparent fast track privatization programme have restored investors confidence in financial health of Pakistan and it is becoming an attractive destination for foreign investment in this region. Hence Pakistan’s foreign direct investment potential coupled with privatization is healthy and it is likely to attract over $1 billion this financial year.

The IMF Mission was also given a brief discourse on reforms being introduced in the CBR including customer-friendly culture, capacity building and efficient tax collection system and State Bank’s role as regulator.

IMF mission was further informed that while performance of some public sector corporations needed improvement, PIA has turned around and have posted profit of over Rs2.4 billion. It is in the process of acquiring a new fleet and would soon sign a protocol with EXIM and OPIC Banks for financing facility. Several other public sector enterprises like the railways, post office and banks have also improved performance.

The meeting among others, was attended, by the governor State Bank, secretary finance, chairman CBR, members of the entourage and senior officers of the ministry of finance.