KARACHI: SBP chief lays stress on economic sovereignty
By Our Reporter
KARACHI, May 5: Emphasizing the importance of maintaining an economic sovereignty, Governor, State Bank of Pakistan (SBP), Dr Ishrat Husain, said on Wednesday that for banishing poverty
, it was necessary to maintain six per cent growth.
He was speaking to students and faculty of the Sindh Madressatul Islam on "the State of Pakistan's economy". Dr Hussain was of the view that the present alarming level of poverty was due to years of negligence, especially since 1989.
He claimed the government had arrested the trend but a real improvement would only be possible if more than six per cent growth rate was achieved for a longer period.
Before October 1999, Pakistan's economy was in shambles and was on the verge of an economic collapse and defaulting of international loans, with $38 billion piled up debt with just two week's reserves, the government was utilizing 66 per cent of the country's resources in debt-servicing.
The SBP chief said the country's debt had now fallen to 34 billion dollars and Pakistan was spending merely 31 per cent of its resources on debt-service, less than what it was spending four years ago owing to some tough decisions.
The decision, though caused hardships but steered the country out of debt trap and put the economy on the road of recovery, he added." We don't want to be trapped in the same situation which was before October 1999," he said, adding that Pakistanis must take notice of the changes in the world around them.
He claimed that four years ago international donors were not prepared to extend financial assistance and to come to Pakistan's rescue. But now after saying "good bye" to IMF facility, everyone was offering various packages on our terms, he emphasized.
Referring to lack of job opportunities, Dr Ishrat Hussain said that poverty and unemployment was a product of adult illiteracy rate and gender disparity. He was of the view that low literacy rate among womenfolk was causing poverty in the country.
The SBP governor said that gender disparity was an impediment to the smooth growth of economy. He stressed that 95 per cent literacy was necessary for a sustainable economic growth.
He called upon the private sector to play its role in providing job opportunities as the government alone could not eliminate poverty and unemployment.
Dr Ishrat Hussain said that if the government started creating jobs in public sector entities, it would benefit only a few thousand people but would not help arrest the increasing poverty as more of the resources of the government would be used in meeting the deficit of such public sector entities, as was the case in the past.
He pointed out that the government was funding Rs 100 billion annually to bridge deficit of public sector entities like Pakistan Steel, WAPDA, KESC etc. He said that Rs 100 million which were spent on bridging the deficit of public sector entities, could have been used for education, health cover, making farm-to-market roads and help the woman folk to get education.
He said that half of the population had been deprived of employment opportunities, which would have helped in decreasing child mortality rate through better nutrition, sanitation, and education of next generation. The chain process of girls' education can help check the poverty in the society, he added.
Dr Ishrat Hussain said that 60 per cent of the country's population lives in the rural areas hence there was a need for increasing their purchasing power by offering good price for their produce.
Referring to increase in support price of wheat and cotton, the SBP governor claimed it would increase purchasing power of the rural folks. It increased development expenditure from Rs 100 billion to Rs 160 billion last year and was likely to touch Rs 200 billion this year.
He also urged the students to work hard as there was no shortcut to success. He also called upon them to acquire new skills and follow the market requirements. In this context, he said that people of over 50 years were studying in the evening classes to acquire new skills and knowledge to escape redundancy.
Earlier, Mohammad Ali Sheikh, Principal of the Madressah in his welcome address, briefed the SBP governor about the institution and its future plans.
