The great Chinese philosopher Confucius had said that he who does not economize will have to agonize. The economic soundness of a nation is vital to its survival. Nowadays, wars are planned, waged and won through economic diplomacy. Being conscious of the ground realities, the government has devised and pursued a multi-pronged strategy to strengthen the economic edifice of the country to ameliorate the lot of the people. Its efforts have not gone unrewarded.
The factors contributing to political vitality and economic growth have been the continuity of policies; dynamic, innovative and participative leadership; good governance; encouraging investment opportunities and attractive cost of doing business.
With a deep sense of patriotism and a result-oriented approach, the leadership has indeed been able to inspire public trust through integrity, probity and prudence.
The continuous fiscal and monetary policies, of course, have successfully liberalized, deregulated and reformed the economic regime to attain equity and fairness in the market. The government has ensured supplies of essential commodities at reasonable prices to alleviate the suffering and privation of the common man. Efforts are under way to restrict consumer price index inflation to a single digit.
The overall size of the development expenditure has been enhanced. Huge investments have been made in education, health, population welfare, the protection of the environment and access to credit. Other tangible measures include the establishment of the Ministry of Textile Industry, the setting up of Industrial Parks, a high quantum of investments in scientific education, and improved infrastructure in line with World Trade Organization (WTO) standards. Key infrastructure‚ “like water storage facilities, power generation, roads, railways, ports, airports and telecommunication‚“ has been developed. Natural resources have also been developed to curtail reliance on imports.
The indigenous production of defense equipment has also contributed to the national foreign exchange earnings.
The Ministry of Industries has established the National Industrial Parks Development and Management Company (NIPS), which has a public-private partnership for the setting up of world standard industrial parks throughout the country.
A network of export processing zones and industrial estates has been established and Pakistan will have access to Afghanistan, Central Asia and China because of the strategic location of Gwadar port.
The Small and Medium Enterprise Development Authority (SMEDA) has initiated a project entitled, “Aik Hunar Aik Nagar‚“ (one village one product ) on the Thai model of one Tambon one product.
Another significant program is the Khushhal Pakistan Program. This comprises small development schemes carried out as recommended by public representatives. These include the electrification of villages, the provision of natural gas, the supply of potable water and the construction of roads connecting farms with markets.
The poverty reduction program has been intensively launched and is being vigorously implemented. As agricultural growth is considered to contribute most toward poverty reduction and job generation, agricultural growth is another important sector the government is focusing on to accelerate the pace of progress.
The services sector has also reflected a remarkable upsurge in the sectors of telecom, banking, insurance, wholesale and retail trade.
A quality culture has been created to beat international competition. Headway has been made in fighting economic and cyber crimes through a continuous campaign. These, apart from damaging the reputation of the country, impede foreign investment. Corrective measures have been put in place to curb copyright piracy, spurious drugs, counterfeit publications, and unauthorized use of telecommunication facilities.
In order to protect, strengthen and integrate intellectual property rights and to promote awareness about related issues in the public and private sectors in Pakistan, the government has established the Intellectual Property Organization, known as IPO-Pakistan. It has been assigned powers and functions to supervise and coordinate the working of all intellectual property offices including the patent office, trade marks registry and the copyright office.
The successful implementation of reforms in areas like financial reporting and auditing, effective monitoring and the evaluation of projects and tax administration has of course salutary effect on the economy. Tax administration reforms cover the rationalization of tax and tariff rates of capital goods (import duty has been reduced on 4,000 items and maximum tariff was fixed at 25 percent) discouraging smuggling-prone items, a creation of tax-payer friendly environment, removing the discretion of Tax Collectors, reducing contact with taxpayers and provisions of facilities to taxpayers.
With the introduction of the Universal Assessment Scheme, lengthy and complex documentary procedures have been done away with.
Through the induction of the Customs Administration Reform Project (CARE), importers have been enabled to file‚“Goods Declaration‚“ without any physical interaction with customs officials. This processing, done through the Pakistan Customs Computerized System (PACCS), has curtailed the clearing time from ten days to a few hours.
Unrelenting government efforts have culminated in boosting the economy. The size of the Pakistan economy has soared to $100 billion. The economy registered a growth of 8.4 percent in the real Gross Domestic Product (GDP) during the last fiscal year. It went up from 6.4 percent in 2003 to 8.4 percent. There has been an average 7 percent annual growth rate, reflecting the fastest pace in two decades. Thus Pakistan became the second fastest growing economy after China. A growth target of around 7 percent is expected to be achieved during the current fiscal year. Annual per capita income has reached $846. The revenue collection target of 835 billion rupees fixed for the current financial year is likely to be achieved.
Exports jumped to $14.41 billion in 2005 while imports reached $20.62 billion. Foreign Exchange Reserves have gone up to $13 billion. There has been a substantial increase in the Foreign Direct Investment (FDI), which is likely to touch $6 billion during the current fiscal year which is much higher than the $3.8 billion of last year. All sectors have been opened to the FDI and 100 percent foreign ownership and protection has been guaranteed. The government has also introduced a mechanism entitled Alternate Dispute Resolution (ADR) to encourage foreign entrepreneurs.
Budget for education is being raised from 2.6 percent to 4 percent of GDP. The country’s literacy ratio is expected to touch 65 percent by 2010 from the present 53 percent.
Privatization through a fair and transparent manner came to 276 billion rupees during Nov. 1999 to Sept. 2005. The sale of 26 percent shares of the Pakistan Telecommunication Company (PTCL) was a distinct transaction. Pakistan’s debt liability declined by $1.28 billion from $37.9 billion to $36.62 in 2005.
Citizens have been empowered through a devolution plan. To bring about a qualitative change in the social fabric of the society, solid efforts are under way to bridge the gender gap and to empower women.