LAHORE, June 11: State Bank Governor Dr Ishrat Husain has stressed the need to depoliticize the country’s economic policies to ensure their continuity.

At a post-budget seminar arranged by the Management Association of Pakistan on Wednesday, Dr Husain said all the political parties had a consensus on the issues the nation was facing, and each party was interested in reduction of poverty and foreign debt and attainment of higher growth rate.

“We have a consensus on all these issues as a nation, but still have never worked together to achieve these goals. As a result, the country and people have suffered.”

The SBP governor, who has described Pakistan’s economy as ‘elitist economy’ in one of his books, said the common man did not reflect in the economic policies due to the “decades of wrong and elitist policies.”

However, he said: “We are making attempts to move towards the economy of the common man, but there is a long way to go.”

He said the budget for 2003-04 was part of an overall economic strategy of the government which would continue at least for five years.

He said the economic policies always “hurt some and benefited the others. You have to be clear about your objectives and make transparent and defendable choices.”

Dr Husain said the central bank would not intervene in the relationship of banks and their borrowers to force the former to bring down their interest rates. He said the interest rate had declined as low as 3 to 4 per cent. However, he admitted, “some were being charged a higher rate.”

He said the low-cost of capital had helped create a demand for credit in the private sector, as its borrowing had jumped to Rs116 billion in the first 10 months of this fiscal year. He said “it was incorrect to say that no investment was being made in the country.”

The import of machinery had increased by 35 per cent in the current fiscal. “Investment is taking place. Growth in value-added textiles is also an indicator of this fact.”

He said lower interest rates had stimulated investment and job generation in the country, but at the same time it was hurting the depositors. To protect the vulnerable segments of society, he added that the government had taken steps in the budget. “The country should find more fiscal space by cutting foreign debt to finance schemes and projects to speed up economic growth and development. We must be on our guard against such rhetorics because it would seriously harm the interests of our future generations,” he said.

The SBP governor also said the government had an agenda to empower the local governments because “they were closer to the grassroots and could play a more effective role in the country’s development.”

He said reforms had to be introduced to improve the working and efficiency of judiciary, police and civil services.

Moreover, exports would have to be increased and the leakages in the government resources to be plugged in order to implement the economic agenda. Besides, he said “public-private partnership must be strengthened at the ground level to achieve economic progress.”