Pakistan needs Urban Economy development: Dr. Salman Shah
Lahore: Advisor to CM Punjab on Economic Affairs, Planning and Development Dr. Salman Shah has said that we need to develop urban economy as the fastest urbanization in the world is taking place in Pakistan.
He was speaking at a meeting at the Lahore Chamber of Commerce & Industry. LCCI President Mian Nauman Kabir presented the address of welcome while former Presidents Mian Shafqat Ali, Sohail Lashari, Zafar Iqbal Chaudhry and Executive Committee Members also spoke on the occasion.
The Advisor said that the urban economy in Pakistan is growing three times faster than the rural economy. Therefore, it should be developed with fastest pace.
He said that the Punjab government formed a policy for solarization in Punjab and 10 to 15 thousands MW solar energy will be added to the system during next two years.
Dr. Salman Shah said that the country needs cheap energy to move economy forward. He said that energy being produced by the IPPs is costly. He said that if we install solar system on canals, it will also help water conservation.
He said that Pakistan can become Mini China as it abundant with young human resources. Young population is swelling and 3 to 4 million youngsters are being added to the work force annually. He said that employment generation of opportunities for these human resources is one of the biggest challenges.
He said that after an end to Vietnam war, the ASEAN countries have made great development. He said that an end to Afghan war has brought good opportunities for Pakistan’s economy.
He said that the debts have become one third of the GDP which is the biggest problem than the current account deficit. He said that the country is paying 3 to 4 billion dollars in debt servicing. He said that the debts will continue to rise until our economy is not grown. “To increase the economy we have to increase our exports”, he added.
He said that the delay in IMF program will be resulted in further devaluation in rupee and hike in inflation. He said that the Punjab government has taken economic strategy to division level. He said that development expenditures of schools in Punjab are Rs. 30 billion while annual subsidy of Orange Train is more than this amount.
LCCI President Mian Nauman Kabir said that the trade deficit in the first five months of the current financial year (July-November 2021) has crossed 20 Billion Dollars, which is 112% higher as compared to the same period last year. The government should take steps for import substitution and bringing diversification in exports through value addition. Furthermore, the export potential of Punjab, especially in the non-traditional sectors of our provincial economy needs to be highlighted.
He said that the lack of stability in the exchange rate market is a huge concern for business community as our industrial sector is heavily dependent on the imports of raw materials and machinery. The massive devaluation in the recent years has increased the cost of doing business tremendously. He underlined the need for measures which need to be taken to minimize the volatility in exchange rate market.
Mian Nauman Kabir said that the inflation rate has increased exorbitantly to 11.5% in the month of November while the food inflation is touching 12%. It is generally considered that food inflation has increased in the recent times due to governance issues at the provincial level.
He said that the policy rate has increased to 9.75%. He said that the Monetary Policy should support Industrialization. Unfortunately in the past, the successive Governments used the policy of increasing the interest rates to control inflation. Instead of curbing inflation, this resulted in rapid De-Industrialization and hindered the private sector growth.
The LCCI President said that the access to finance is a persistent challenge for our private sector. The SMEs in Pakistan only get 6% of the private sector credit while the number of SME borrowers is only around 163 thousand.
He added that the cost of land for the business community in the Industrial Estates in Punjab has increased exorbitantly. He said that there is need for a simple lease policy through which the land in the existing/new Industrial Estates can be provided at reasonable rates on long term lease.
Mian Nauman Kabir said that another issue is the lack of uniformity in water tariff across the major cities of Punjab. For example, the water tariff for industrial and commercial users in Lahore is considerably higher (Rs.100,000 for 1 Cusec per month) as compared to other cities of Punjab (Rs.19,000 in Faisalabad for 1 Cusec per month).
LCCI Executive Committee Members Abdul Wadood Alvi, Muhammad Nadeem Malik, Shahzad Butt, Tehmina Saeed Chaudhry, Mian Ateeq ur Rehman and Riaz ul Hassan were present on the occasion.
