LAHORE, Aug 26: State Bank Governor Dr Ishrat Husain has expressed his surprise at industrialists’ reluctance to invest in the country though the amount of loan drawn from banks increased from Rs44 billion to Rs153 billion in one year.

He was speaking at the Lahore Chamber of Commerce and Industry here on Tuesday.

He said all economic indicators were rising. The machinery imports had increased by 37 per cent, cement production by 12 per cent and steel production by 25 per cent.

“It is a puzzle for me where all the credit and production have gone,” he said and hoped industrialists would help him understand the phenomenon. “After all, you are not importing machinery for keeping it at home.”

Dr Husain urged them to invest in the country, create job opportunities and help solve the unemployment problem, reopen the large number of industrial units which have been lying closed for years. The banks would be asked to advance loans for the purpose, he added.

The SBP governor said with the proposed privatization of Habib Bank, almost 80 per cent of the banking would go in the private sector while only National Bank would remain in the public sector.

He said the banks’ interest rate had been drastically reduced from 21 per cent to 7 per cent only to stimulate the private sector to invest in the country. Unfortunately, no investment had been made or employment opportunities generated which could provide relief to the poor and the jobless youth.

He said both the public and private sector should find ways to increase investment and generate employment. Dependence on the government for everything should end now as it could not afford to run transport or some other commercial activity. The world had changed. Things were being done according to merit and credit rating. Integrity, delivery and quality of forex were the need of the hour. Only those people and institutions succeed who have a good track record, honest and hard working staff.

Dr Husain said textile industry was making good progress. It had imported machinery worth Rs4 billion for modernization of its units. Since it was replacing the old machinery with new one, it was not generating employment opportunities.

He said he had recently visited India and found that the textile industry there was far behind that of Pakistan.

The SBP governor said banks had been asked to provide funds for the construction and housing industries. Progress in this industry could generate employment as there were about 37 other industries associated with them.

Earlier, LCCI president Yawar Irfan welcomed the SBP governor and other members pointed out the problems facing the industries.