LAHORE, May 12: President Gen Pervez Musharraf on Monday assured the businessmen of continuity in the economic policies and reforms undertaken in last three years, and urged them to set up new industries, particularly in the engineering sector.

The president was addressing the businessmen at a ceremony organized by the Lahore Chamber of Commerce and Industry (LCCI) to celebrate the 80th year of its inception here on Monday.

LCCI president Yawar Irfan Khan greeted the president and gave a detailed presentation on the problems facing the businessmen.

Recounting the economic achievements during the three years of military rule, the president said the (present) government needed to focus on enhancing the GDP growth. He said if the present course of policies was not disturbed, the country was sure to achieve 6-7 per cent GDP growth in the next 2-3 years.

In a passing reference to the Legal Framework Order, he stated it protected the economic reforms and restructuring of different public sector institutions like the SBP and the SECP made during the last three years.

He also underlined the need for luring fresh investment in the industrial sector, and whatever economic success had been achieved was due to maximum utilization of the potential of the existing industry. He said the government would also try to bring home to overseas Pakistanis to invest in their country.

Hoping that the foreign direct investment would cross the mark of $1 billion at the end of the current fiscal year, he said the foreign investors would also be lured to invest in Pakistan.

Claiming that poverty had come down by around 0.80 per cent in the recent years, he said the ration needed to be brought down to 20 per cent from the present 32 per cent.

The president said his government had managed to stabilize the economy despite 9/11, Indian military build-up, and Afghanistan’s situation. “It is not a mean achievement that we have succeeded in plugging the holes and stabilized the sinking ship we had inherited (on October 12, 1999). But we still need to go a long way,” he added.

He said his government had brought down the fiscal deficit to 4.5 per cent from seven per cent. The debt was slashed to 44 per cent of the country’s budget from the previous ratio of 66 per cent, several mega infrastructure projects had been launched, debt:GDP ratio was improved to 90 per cent from 110 per cent and the current account deficit of $5.5 billion converted into $2-2.5 billion credit.

Gen Musharraf said many eyes were (set) on Pakistan and it was “negotiating a minefield of international, economic, and regional pressures.” Without elaborating his statement, he added Pakistan, though located strategically, was part of a turbulent region. “We got to protect this ship and sail it safely through to prosperity and progress.” Talking about restructuring of the CBR, he stated all irritants and problems in the way of doing business would be removed. But, he added, the businessmen must also pay taxes to generate revenue so that development projects could be initiated. He said Pakistan had a potential of generating Rs800 billion or so in tax revenue, but “our collection remains somewhere close to Rs450 billion.”

Gen Musharraf was hopeful that the power rates would come down in the next few years as Wapda was laying greater emphasis on the production of hydel energy and conversion of thermal plants on to gas and coal to reduce the production cost. “Allow this some time to happen, the power prices will be reduced.” Wapda had also seen a turnaround in the last three-and-a-half years after the army got its charge, he said.

Conceding that the law and order situation in the country was not fully under control, the president claimed that the situation had improved a lot during the last couple of years. He said the law enforcing and intelligence agencies had succeeded in breaking up the network of terrorists and checking sectarian violence. “All known terrorists have either been killed or put behind the bars.”