December 06, 2006	Wednesday	Ziqa'ad 14, 1427

LAHORE, Dec 5: Corruption, weak public institutions, political instability and repeated coups continue to be real challenges for Pakistan’s economic growth and competitiveness in the world.

This was crux of a day-long discussion on “Pakistan: growth and competitiveness”, at a World Bank sponsored conference at Lahore University of Management Sciences. Some of the speakers also found costly supply of energy, weak infrastructure and lack of judicial reforms as reasons for many problems Pakistan faced today.

The tackling of corruption and resolving political administration related issues are important under which it should be decided whether the country will be ruled by the army or the army is to be subservient to the elected representatives, said Dr Abdul Hafeez Sheikh, who was until recently a federal minister for privatisation and investment.Most of the speakers including academicians were almost of the consensus opinion that corruption and weak public sector institutions were at the heart of Pakistan’s problems and unless confronted head-on, no policy measures and incentives could be of any help.

Dr Sheikh said enumerated many failures of the current military regime that varied from water and power sectors, to aviation industry and from shipping to gas and Thar coal development. On the positive side, he mentioned telecom, banking and privatisation as successes.

The major problem of Pakistan, he said, was that we have not been able to settle political disputes and inter-provincial issues like NFC, water distribution etc. He said that macroeconomic stability is a must but not sufficient for bringing change in the lives of the people.

He said that the country’s economy started to improve after 9/11 in the shape of high remittances arising out of fear and capital aid and rescheduling of foreign debt. He was of the opinion that growth spurts driven by aid were destined to increase disparities and felt sorry for the fact that just a seven per cent of foreign direct investment went into the manufacturing sector which was not a good sign on the long-run.

Former finance minister Sartaj Aziz said the investment to GDP ratio was quite low and Pakistan could not sustain high trajectory of growth with existing trend of investment. An investment to GDP ratio of at least 27 per cent was a must to achieve growth rate of seven per cent.

He said Pakistan achieved higher growth during three military rules when the country was needed by the foreign powers for their agendas but it never helped reduce poverty.

The World Bank country chief John Wall said that a recent study conducted by the bank has found a few key weaknesses about Pakistan including costly business regulations, weak public institutions, corruption, political uncertainty and weak infrastructure.