Multi-faceted reforms bear fruit: President

ISLAMABAD—President Pervez Musharraf on Thursday said Pakistan’s economy, which was in shambles before the October 1999, has been put on the path of higher growth trajectory through a multi-faceted reforms strategy conceived and implemented over the last eight years.
“We were about to be declared as a failed and defaulted state in 1999 in contrast to what we have achieved now. Our kitty was empty and the foreign exchange reserves were not even enough to finance the external payments for two weeks. Standards & Poors and Moodies - world credit rating agencies - had put Pakistan in the selective default grade”, he said while speaking in a weekly special PTV programme `Aiwan-e-Sadr Sey’.
The President, during this weeks programme titled “Pakistan’s economic landscape - past and the present”, spoke at length on each and every aspect of the economy ranging from economic growth to fiscal discipline, debt management, revenue collection, foreign direct investment, balance of payment, per capita income and banking sector reforms etc.
He said it was owing to the economic reforms strategy followed over the last eight years that the country’s GDP (Gross Domestic Product) which was US $ 63 billion in 1999 has now reached US $ 162 billion, with GDP growing at an average of 7 percent for the last four years, per capita income increased to $ 925 from $ 435 and debt to GDP ratio coming down from 101% in 1999 to 54% at present.
The President further informed that the revenue collection which was at around Rs 300 billion in 1999 has crossed a record Rs one trillion, creating more fiscal space for development expenditures as allocations under the Public Sector Development Programme (PSDP) which hovered around Rs. 80 billion during 1988- 99 period have reached Rs. 520 billion this year.
Similarly, he said, owing to the prudent economic polices over the last eight years the Foreign Direct Investment (FDI) which was around $ 300 million in 1999 has now peaked at $ 6.5 billion, with remittances reaching $ 5.5 billion, exports at $ 17 billion - up from $ 9 billion, imports at $ 26 to 27 billion, forex reserves at around $ 16 billion, Karachi Stock Exchange (KSE) index raising to 14,000 points at present from 1000 in 1999 and exchange rate stable.
President Musharraf said Pakistan was suffering from debt and investment dilemma in 1999, as the foreign investors were shying from the country due to its poor economic fundamentals.
He said the first and foremost challenge before him after he took control of the country’s affairs in 1999 was to check the higher fiscal deficit - gap in income and expenditures, which was mainly due to high public expenditures and haemorrhaging of funds. The President said the government then started the process of privatizing the public sector institutions, most of which were running in losses and the government had to inject billions of rupees every year to the public sector institutions like UBL, Rice Corporation of National Shipping Corporation etc.
He said in order to check the gap between income and expenditures the government not only resorted to lesson the cost of running the government and curb haemorrhaging but also introduced the CBR reforms and documentation of the economy to enhance the much needed revenue and capitalize the true potential.
The President said main focus of the CBR reforms was to minimize the contact between tax-payers and the tax-men and eliminate the discretionary powers of the tax officers. He said these reforms worked and the revenue collection which had reached only Rs. 306 billion from 1947 to 1999 was now set to cross Rs. trillion figure and the fiscal deficit has been reduced to around 4 percent as against around 10 percent in the decade of 1990s.
Similarly, the President said the current account deficit, which used to be around $ 5 to 6 billion per annum due to higher debt servicing, was now in surplus of $ 2 billion for the first time in the country’s history due to economic turn-around achieved through prudent management.—APP