ISLAMABAD, Feb 28: Minister of State for Finance Omar Ayub Khan said on Wednesday that privatisation of Pakistan's key industries is one of three pillars on which continued growth and diversification of country's economy depends.

Speaking at the Middle East IPO summit being held in Dubai, Omar Ayub Khan said the other two pillars are deregulation and liberalisation.

By formulating economic policy based on these three pillars the government has been able to boost growth, reduce poverty and improve income distribution, as well as diversify economy, he said, adding, the size of middle class has grown which has a greater “propensity to consume”.

Pakistan's GDP is forecast to expand seven per cent in the current fiscal year from 6.6 per cent in 2006 to reach about $135 billion. Foreign direct investment is forecast to reach $6 billion for fiscal year 2007 and it has already crossed $3 billion, Omar said.

Pakistan's trade liberalisation and privatisation programmes are based primarily around the banking, electricity, telecommunications and energy sectors.

Over the past 15 years, Pakistan has raised more than $6 billion selling state assets to help repay $36 billion of overseas debt.

Among the assets that are currently up for sale are shares of four banks and a stake in PSO, which will be sold by June. The country will also sell shares of Habib Bank in an initial public offering by April.

And there are plans to sell global depositary receipts held by United Bank and National Bank of Pakistan by June.

Omar said Pakistan's economic performance continues to generate a great deal of interest and investors from the Middle East and Dubai in particular are looking for key investments in the country.

The recent visit by Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and ruler of Dubai, is an indication of it, he said.

He said, Pakistan would strengthen its competitiveness by continuing to create industry clusters, which help to promote knowledge transfer and build human capital. Pakistan's young population will also propel Pakistan's economic growth and will enhance its competitiveness against countries, such as China and India.—APP