KARACHI, April 10: Finance Minister Shaukat Aziz claimed on Saturday that his government "has effectively tackled the poverty problem".

"This does not mean that poverty has been eradicated," the minister added hastily, pointing out that poverty "remains the biggest challenge" for his government and the next fiscal year's budget would address this issue in a big way.

Addressing a pre-budget seminar of the Karachi Chamber of Commerce and Industry, Mr Aziz also claimed having posted an increase in investment. "The total investment has jumped from 15.6 per cent of GDP to 16.6 per cent in the current fiscal year," he said.

A record growth of 15 per cent has been achieved in industrial production during the current fiscal year, he said, adding that it had contributed to a certain extent in addressing the unemployment issue.

"The average earnings of masons and construction workers have increased by 9 per cent in the current year," he informed the businessmen on the basis of his study. "You don't find plumbers and masons on wages you were paying them a year ago," he pointed out.

He ridiculed all those who had been criticizing the government for addressing only the macro-economic stabilization.

"Why don't these people realize that economic activities at the micro level accumulate to make macro-economic achievements?" he queried.

He said the government had reorganized the Federal Bureau of Statistics to keep people informed of the latest data on investment, unemployment and growth.

Shaukat Aziz said that poverty "is much more glaring in rural areas." The agricultural growth, he said, could tackle rural poverty.

He hoped that injection of an additional Rs65 to Rs70 billion cash, by way of increase in prices of cotton and wheat, will bring about some prosperity in the rural economy.

He reiterated his government's determination to prepay one billion dollar loan amount to donors this year. The finance minister reminded the gathering that the government had recently made a loan pre-payment of 1.17 billion dollars.

After hearing a long presentation on the impact of the government's economic policy on business environment in the last four years and the businessmen's unease over taxation measures, Mr Aziz simply said that all these proposals and observations will be considered during the budget-framing process.

The finance minister's speech was a replay of the presentations he has been making about his government's achievements at various fora. He highlighted what he called the government's"consistency in its economic policies" over the last four years.

He said the government would stay on course to achieve a growth rate of 5.5-5.6pc this year.

"An annual economic growth of 6 per cent-plus is the only way to tackle poverty," he remarked.

Mr Aziz's advice to the businessmen was to prepare themselves for making adjustments with a growing economy "because if you will not take advantage of the opportunities, others will."

He announced that the government will come out with second-generation reforms after consolidating the gains made from those made in the last four years.

Earlier, Karachi Chamber of Commerce and Industry president Siraj Kassam Teli in his address of welcome praised the minister for "his hardwork, farsightedness and vision". He said he rescued the country from a near economic collapse four years ago.

He demanded elimination of all discretionary and arbitrary powers of the taxation officials, reduction in the rate of sales tax, quick refund of sales tax, phasing out of the excise duty on industry, zero rate on the import of machinery and equipment. He also urged that dry ports be used only for export.

Farooq Lakhani made a detailed presentation of a survey finding which showed that business confidence had gained strength from the economic reforms in the last four years.