July 26, 2003	Saturday	Jumadi-ul-Awwal 25, 1424

KARACHI, July 25: Federal Finance Minister Shaukat Aziz on Friday said he had finalized a plan to repay $1 billion in debt to the multilateral agencies during the current financial year, ahead of schedule.

“I have finalized the details this morning to prepay $1 billion to the World Bank, the IMF and the ADB,” the minister told the meeting of the American Business Council at a local hotel here. He did not give the beak-up of how much Pakistan intends to repay to each agency. Pakistan owes 45pc of its total debt to multilateral agencies.

The minister was confident that additional repayment plan would not deter the comfortable foreign exchange reserve position of the country. The country has foreign exchange reserves of about $11 billion.

Shaukat Aziz urged the businessmen to make Pakistan ‘a manufacturing hub’. He termed it a “wake up call” for American companies operating in Pakistan. “You will never find a more opportune time to expand your business in Pakistan as the country has left its difficult economic past behind and is on a path of a sustained growth,” he said.

Aziz said that the current account surplus has shown marked improvement, cost of credit is at all time low, economy is growing at the rate of 5pc and above, rupee is stable and the government is committed to continuity in economic policies. He said that the investment environment is conducive and it’s high time that heads of companies “step out of their comfort zones and take decisions for expansion.” He urged the CEOs of multinational giants to introduce Pakistan to the senior management of their principal. He said Pakistan is a fit case to merit place in their corporate expansion schemes.

“If you are not expanding in an economy that is growing at 5-6pc, then you are losing market share,” he warned. He said there is a great scope for Pakistan to emerge as manufacturing hub in the region. “There are plans to improve road linkages with neighbouring Afghanistan and Central Asian states.” The Asian Development Bank has shown interest to finance road construction projects to improve connectivity with other countries of the region for trade. “The ADB has convened a meeting of six countries including Pakistan and Afghanistan in Manila next month with six countries including Pakistan and Afghanistan,” he said.

Shaukat Aziz also hinted that electricity cost might be rationalized after 2005. He pinpointed factors such as situation with IPPs (that are front loaded) that, in his view, would ease off by the end of next year. Total share of hydel power that has come down from 36 to 26pc due to drought is expected to improve with favourable weather conditions. “There is also move to shift gradually from furnace oil to gas and coal that are lot more cheaper,” he said.