Shah highlights steps needed to revive economy

Former finance minister says 8% growth is critical for country’s survival

FAISALABAD: Businessmen and entrepreneurs will have to change their mindset, adopt modern techniques and focus on infrastructure development and public-private partnership for survival in the 21st century, suggests Dr Salman Shah, former federal minister for finance.

Speaking at a conference on “Revival of Pakistan’s Economy”, organised by the Faisalabad Chamber of Commerce and Industry (FCCI) on Monday, Shah asked businessmen to adopt a progressive and viable approach to confront the problems besetting the national economy.

Elaborating, he said the economy had sunk and was not progressing at the desired rate of 8 to 10% per annum, a level critical for the survival of the country. He suggested that the businessmen should unite at a common platform and draw up a charter of demand to implement the common agenda pinpointed by experts.

Shah also advocated deregulating the economy. Citing an example, he said the telecommunications sector had been deregulated and was successfully serving the people. Similarly, he said, if the railways, oil, gas and power sectors were also given in public-private partnership, the government would see a fall in expenses and the economy would take a positive turn.

He emphasised the need for providing facilities and direction to the businessmen in the search for untapped international markets. In this regard, central Asian states, Latin America and Far East were cited as the markets open for foreign trade.

Shah called for reducing the productivity gap in the industry, business and trade with proper value addition and quality control, which would automatically raise the income of manufacturers, exporters and traders. In the international market, a particular brand of Pakistani shirt is selling for $1 only whereas China and other countries are selling their shirts for $16.

Speaking on the occasion, former State Bank of Pakistan governor Dr Shahid Kardar stressed that the country’s economy should grow at 8% per annum to absorb the 230 million youth that would enter the labour market in the next 35 years.

He suggested that savings rate of less than 15% of gross domestic product (GDP) should be brought to 30%. In India and China, the savings rate is more than 35%. “All – the government, corporate sector and common man – should play their part to achieve this and the government should change its preferences,” he said.

Eminent economist Dr Akbar Zaidi described small and medium enterprises (SMEs) as an engine of growth, saying SME growth would not only increase employment opportunities, but would also help increase GDP growth of the country.

Published in The Express Tribune, November 13^th, 2012.