April 27, 2006	Thursday	Rabi-ul-Awwal 28, 1427

WASHINGTON, April 26: State Bank Dr Shamshad Akhtar said on Monday that Pakistan economy was having a smooth sailing now. “The economy is on track — there is high growth rate, a lot of positive new things are happening, and there is an upbeat environment,” she said this while speaking at a discussion on “Perspectives on monetary policy developments in Pakistan” organised by the Asia Society of the Woodrow Wilson Centre (WWC) for Scholars.

“Due to rising oil prices, we have to work on a tight rope. The economic team is doing marvellous and that launching of international bonds has lent credibility to the economy.”

As a consequence of advancement, she said, Pakistan had now entered into a stage of “complicated economic management” from a simple economic management. She sounded apprehensive, saying: “I don’t think we are equipped for it.”

The SBP governor said Pakistan had adopted a liberal and market-oriented policy as of 1990, to manage monetary aspect, while there had been subsequently changes in regulatory and operating procedures.

“In its regulatory role, the SBP makes regular reviews of monetary management and keeps an eye on price stability.”

She commended the government efforts to maintain high growth rate, but said that a record 11.3 per cent inflation seen in April last year was alarming, and all efforts should be made to contain it at below eight per cent in 2006, as a higher than eight per cent inflation rate often hurt growth.

Javed Burki, former World Bank vice-president and Pakistan finance minister, referred to an example of Brazil which took off but its economy fell due to lacunae in its implementation system. He pleaded for a constant vigilance in Pakistan so that attainments made in the economic area remained long-lasting and enduring.

William Milam, senior scholar and former ambassador to Pakistan, said Pakistan economy had shown great signs of vitality, but there were concerns and hoped the new governor would address them.

In 1998, he said, the economy of Pakistan was “sinking slowly” and after the sanctions, the situation became worse.

Bob Hathaway, director of the Asia Society Programme, said the society had brought out a book titled “Education Reform in Pakistan: Building for the Future”.—APP