KARACHI, Sept.15 The popular elected government is finally divorcing the concept of consumption-led growth to shift to production-led growth during the next five years for which the panel of well-known economists of the country did an initial brain storming session on Saturday and Sunday.
“For last eight years, we practiced with religious zeal the principle of consumption led-growth for our economy and have ended up now with an unprecedented unemployment, a battered agriculture, a crippled industry and a market that is flooded with consumer goods from all over the world,'' an economist associated with a well-known private consultancy remarked.
He said only the banks, stock exchanges and brokerage houses flourished, thrived and earned massive profits in last eight years. But now all these institutions are on the verge of collapse these days after losing state patronage.
The government is desperately looking for relief on bilateral and multilateral basis and has asked the economists to develop a home grown strategy for production-led development and growth for next five years. “This document will be given to all our friends, who are ready to help Pakistan on bilateral or multilateral basis,'' he disclosed.
“Initially for a short-term strategy, it is agriculture-led growth and finally the real sectors -- agriculture and manufacturing - both are expected to be upgraded to contribute in growth, generate employment, revenue and strengthening social security nets,'' a well-known economist, who is a member of the panel engaged by the government, informed from Lahore.
For this purpose, the panel in its two days session, in which Prime Minister Yousuf Raza Gilani, Deputy Chairman Planning Commission Salman Farouqi and several federal secretaries participated, constituted four working groups to prepare reports.
Dr Hafiz Pasha, a former federal minister and adviser, is preparing the main report, which is expected to be completed by end October on macroeconomic stabilisation. Simultaneously, three other groups are being asked to prepare reports on growth strategy, institutional framework for development and security nets.
“While the findings and recommendations of main report on macroeconomic stabilisation will be put into operation very soon -- late October or early November — when the government will unfold its new economic agenda and new targets for the year 2008-09, the suggestions of three other reports will be incorporated in budgets of the coming years,” a source disclosed.
Sources in government and in private consultancy say that the government on its part has taken most of the harsh and unpopular decisions in last four months. The burden of subsidy on the budget has been shed off to a great extent after recent decisions to raise oil, gas and electricity prices, the inflation has apparently touched its peak and whatever harsh criticism could be made on the government has been leveled.
“After a big cut in expenditure budget—development and non-development both, the government expects substantial relief from friends on bilateral and multilateral basis, there are all possibilities of unleashing of a spate of good news,'' private and government sources expect. They also hope for a gradual fall in inflation.
Relief from international donors on bilateral and multilateral basis hinges on undisclosed and unwritten political agenda and targets set by the international community. A temporary peace truce in Balochistan is helping to reduce expenditure on movement of army contingents. Right results from the NWFP operations should also go a long way in improving expenditure budget.
Economists in Karachi and Lahore say that Pakistan's 60 years history is replete with one economic and political crisis following the other. It is because the ruling elite in Islamabad are a prisoner of a sick concept. Pakistan's geo-political location has made it an indispensable ally for international community. “Come what may, howsoever reckless Islamabad's ruler may be, USA, Saudi Arabia and Middle Eastern Muslim kingdoms just cannot afford any destabilisation of Pakistan,” he observed.
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