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Country needs economic survival first: Pasha

RECORDER REPORT

KARACHI: "Country needs to think first of economic survival, not economic revival", said Dr. Hafiz Pasha, Managing Director, Social and Political Development Centre (SPDC), at a forum at Shaheed Zulfikar Ali Bhutto Institute of Science and Technology SZABIST.

Political stability is a pre-requisite for sound economy, he said.

Dr. Pasha suggested that macro-economic indicators were depicting a downward trend, and if they were not arrested they would lead to a deep recession.

He said that country's growth rate had declined to mere three percent which was about six percent in the 80s.

In Pakistan , one out of every three families is below the poverty level while this rate was one out of five previously. Pakistan's unemployment rate is twice what it was at the beginning of the 90's.

Giving a brief of present state of economy, Dr. Pasha said that investment has stagnated demand for credit gone down by 60 percent due to change of governments and their policies, growth in the stock markets might be up temporarily.

Investment has been on decline since May 1998 and the public sector was hit hard which has failed even to maintain the present infrastructure.

He said that economy could be revived through reducing tax and interest rates, expanding credit base, depreciating the currency, raising agricultural prices, etc.

Discussing the problems Pakistan's economy is facing he said that the huge external debt and large debt servicing liabilities were, the major problem. The revival of our economy is based on balance of payments, which, in the absence of further debt relief, looks unsustainable.

He said that the most important question is that how does Pakistan make a transaction in December 2000.

Dr. Pasha said to Pakistan a major problem is not with investment but with investors confidence. "We need to manage our micro-credit scheme very well. Revival can only become through public investment in sound projects, not motorways".