ISLAMABAD, Nov 22: Pakistan could not overcome the challenges of poverty reduction, increase in investment level and creation of employment opportunities although macroeconomic stability has been achieved during the last couple of years, said Finance Minister Shaukat Aziz.

Speaking at a news conference here on Saturday, the finance minister said a new survey had been launched to ascertain accurate data on poverty.

When asked why poverty level had risen over the past couple of years, he said poverty could not be reduced immediately as it needed some time after achieving macroeconomic stability and fiscal discipline.

The finance minister said growth rate of 5.3 per cent was still achievable despite lower than targeted cotton production during the year because some other factors like a bumper sugarcane crop, higher manufacturing sector growth and enhanced availability of water would compensate low yield in the agriculture sector.

Mr Aziz said the next meeting of the National Finance Commission (NFC) had been convened on Dec 13 in Lahore, and the provincial finance ministers had been asked to meet separately a day before that meeting to evolve a consensus on the resource-sharing formula.

He said the date for the next NFC meeting was fixed at a meeting he held with the prime minister on Saturday.

The finance minister said the government would not disclose the exact amount of eurobonds to be floated next year as it would depend on the market response, but added that it would be kept as low as possible.

He said lawyers for the floatation of bonds had been appointed, while a placement memorandum was under the preparation stage. Road shows for the bonds would be held early next year and the paper was likely to be floated by the end of February because of Haj, as target market was the Middle East, Far East and the Europe.

Mr Aziz disclosed that principal accounting officers of the federal ministries had been authorized to draw up to 45 per cent of the project allocations to ensure better utilization of public sector development programme. Responding to an IMF observation that Pakistan was facing a lot of resistance on its reforms programme from within and outside parliament, the minister said the government was not facing any resistance from any quarter. He minister said the strong fiscal discipline, spending and revenue collection performance remained on track despite taking over by a new democratic government.

Talking about the 12-month (November 2002-October 2003) performance of the Jamali government, the minister said the industrial production was better than ever, consumption pattern was rising, exports were performing well and revenue was increasing.

He said revenue during the month of October amounted to Rs42 million which was Rs2 billion higher than the target. Overall tax collection during the first four months of the current fiscal amounted to Rs136.1 billion, which was 8.9 per cent higher than last year’s Rs125 billion.

Similarly, exports and imports had increased by 14.2 per cent and 12.9 per cent respectively during the first four months of the current fiscal year, he said.

The minister said industrial production had increased by 10.2 per cent during November 2002 to October 2003, while tax collection rose by 12.8 per cent.

Lending rate during the one-year period of the elected government had declined from 10.66 per cent to less than seven per cent and six-month treasury bill rate

had declined from 4.76 per cent to 1.82 per cent.

Growth in exports stood at 21.7 per cent and an addition of $2.91 billion was made in the foreign exchange reserves while the exchange rate strengthened by 2.4 per cent during the one-year period.

The minister, however, admitted about 14 per cent reduction in foreign remittances and foreign investment.

He said portfolio investment from abroad was increasing and the total market capitalization of the stock market with the listing of OGDCL shares had touched Rs1 trillion level, which was equivalent to $17 billion.

The finance minister said foreign exchange reserves were close to $12 billion (exactly $11.9 billion) at the end of October. He said the government was still intervening to contain further strengthening of currency so that exports are not affected.