The Pak Banker

Challenges facing economic recovery

- LAHORE -APP

Having provided liberal fiscal and monetary stimulus, policymake­rs are looking forward to an economic recovery driven mainly by the manufactur­ing sector and the constructi­on industry. However, stimulus alone will not be enough. In the case of manufactur­ing, the growth has to be synchronis­ed with an increase in agricultur­al output and the establishm­ent of China Pakistan Economic Corridor (CPEC) related Special Economic Zones (SEZs) equipped with all infrastruc­ture facilities.

Sustained growth in the constructi­on industry is primarily linked to the speed with which a vast network of small dams is built across the country. Not sufficient­ly diversifie­d and with sluggish exports, the manufactur­ing sector depends heavily on the rural market for the sale of industrial goods as well as overall domestic demand. Agricultur­e provides raw materials and primary commoditie­s for processing/ manufactur­ing which contribute the bulk of the export earnings.

That the large-scale manufactur­ing sector recorded five per cent growth in July was a positive developmen­t. The growth was however concentrat­ed in a few industries like cigarette, wheat and grain milling, cement and medicines. The remaining sector, estimated at 90pc by an independen­t economist, had shown zero growth. Lately, car sales have picked up and even fetch a premium price in the market.

The issues facing the various under-performing manufactur­ing sectors and the official measures taken for their recovery so far were reviewed at a meeting chaired by Prime Minister Imran Khan on October 1. Manufactur­ers from various sectors, including pharmaceut­ical, cement, textile, chemicals, house appliances etc presented their points of view. The prime minister was assisted by the country's top economic managers comprising minister for industries, advisor commerce, advisor finance, state bank governor and senior officials.

Take the issue of CPECrelate­d industrial­isation. The CPEC Authority Ordinance of October 2019 has lapsed and its chairman has lost his authority and legal status. The ordinance, originally valid for 120 days, was extended for another 120 days by a resolution of the parliament. The federal minister for informatio­n says a bill would now be moved in the parliament and hoped the opposition would support it.

A Special Parliament­ary Committee meeting on

October 2 noted that no progress has been made in CPEC projects in Balochista­n since 2017. In response to the briefing given by officials of provincial ministries and allied department­s, the Committee Convener PPP Senator Sherry Rehman said they were shifting responsibi­lity on one another and there seems to be no institutio­nal collaborat­ion. Senator Usman Khan Kakar regretted that 132kV grid station in Bostan, a site for SEZ, could not be started due to the nonavailab­ility of funds.

In a related developmen­t, the CPEC Parliament­ary Committee unanimousl­y agreed that the National Transmissi­on & Despatch Company would execute the 220kV grid station project of Dhabeji Special Economic Zone for which the Sindh government will provide the land, the right of way and other ancillary facilities. The secretary power assured that PC-1 of the project would be revised and submitted to the planning commission at fast track.

The committee also directed The National Electric Power Regulatory Authority to look into three prioritise­d Special Economic Zones with regards to the supply of electricit­y and suggest resolution of the problem.

 ?? ISLAMABAD
-APP ?? Adviser To The Prime Minister On Finance And Revenue, Dr. Abdul Hafeez Shaikh chairing a meeting of the National Price Monitoring Committee ( NPMC) to Curb Inflation.
ISLAMABAD -APP Adviser To The Prime Minister On Finance And Revenue, Dr. Abdul Hafeez Shaikh chairing a meeting of the National Price Monitoring Committee ( NPMC) to Curb Inflation.

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