LONDON, Oct 4: State Bank Governor Dr Ishrat Husain has said Pakistan is back on a trajectory following introduction of structural economic reforms which will enable it reduce the current 33 per cent level of poverty to 18 per cent.

Speaking at a reception hosted by the Pakistan Society here late Monday, the SBP chief updated a select gathering of bankers, economists and businessmen of the structural reforms introduced in last five years to not only pull the country out of its economic crisis in 1999 but also to revive its economy.

“This was done by bringing in a new monetary policy which helped both stimulate the economy and achieve 8.4 per cent growth rate this year,” he added.

Pakistan’s envoy to London Dr Maleeha Lodhi was also present on the occasion. A senior member of the Pakistan Society Yasin Anwar organized the reception on behalf of the society which was sponsored by the United National Bank here.

Giving a comparison of the past and current state of the economy, he said Pakistan, with just a $100 billion in its kitty was at the verge of bankruptcy five years ago. But now it had not only won back credibility from the international lenders like World Bank, but had over $12 billion in its foreign exchange reserves.

The World Bank, he said, had declared Pakistan as one of the top 10 reformers which was a great achievement. The country which had 160th rating for doing business was now rated as the 60th country in the world.

He said the country had reduced debt burden and had in place an investor friendly regime as a result of wide-ranging economic reforms implemented during this period by the government.

Pakistan, Dr Ishrat said that was one of the few countries where 80 per cent banks were now in the private sector which had generated a competition. The banks had given $7 billion loans in last two years alone and people now could borrow for buying cars, motorcycles etc. The car production in the country had gone up from 30,000 to 150,000 while sale of motorcycles soared from one million to five million to cater to the rising demand. “This has generated more employment opportunities,” he said.

Explaining the rationale behind reforms in all sectors of the economy and the government’s drive for privatization, he said, the government had no business to be in business. “Now there is no restriction on the investors either to bring in the capital or take out their dividends.”

Fielding a question on the existence of the black economy, Dr Ishrat said that no country could totally control it as even in Sweden there was a large black economy. However, the government had already initiated a raft of measures to deny incentives to the black marketeers, as for instance, it had cut the tariff rate from the past 22pc to 12 per cent.

Asked about the corruption in the country, Ishrat said, it was non-existent on the top which had been acknowledged by the Transparency International. But he said corruption did exist at the middle and lower level and the government had slashed the discretionary powers of income tax officials to check it. Now no SRO was issued for an individual rather it would be either sector-based or for a group of companies.

He told another questioner the biggest problem in Pakistan had been fiscal indiscipline. But with the autonomy of the State Bank and a strong media, he said, would work as the restraining influence over any government not to exceed its budgetary powers. —APP