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COVER STORY: PAKISTAN
... And Their Economic Lives
. India
. Pakistan
Figures are the latest available estimates.
Source: Economic Surveys of India and Pakistan;
World Development Report, World Development Indicators; Human Development
in South Asia
INTERVIEW: S. AZIZ
"We Need The discipline"
Pakistan Finance Minister Shaukat Aziz was honest in
his assessment of the country's economic health in an exclusive interview
with Executive Editor Raj Chengappa. Excerpts:
ON THE STATE OF ECONOMY: We were facing
slow growth, weak investor confidence, increasing poverty and poor governance.
Major challenges were ballooning fiscal deficit, high current account
deficit and rising debt. In December 1999, we launched a medium-term economic
recovery plan. We are changing the culture and that takes time.
ON SLOW GROWTH: We were unlucky to have
the worst drought in 50 years last year because of which agricultural
production fell by 2.5 per cent. The overall economic growth was 2.8 per
cent. Manufacturing grew at the rate of 8 per cent, the highest in 15
years.
ON TAX CUTS: We have taken the hard route
of broadening the base and improving tax administration. We have reduced
the number of taxes as also the rates. We went through a tax documentation
and survey exercise to bring down evasion. The efforts have resulted in
14 per cent increase in tax collection.
ON DEBT AND FISCAL DISCIPLINE: We have
re-established credibility with donors. We have received over $1 billion
from the IMF, World Bank and the ADB in the past one year. We need the
discipline to put the economy on a sound footing. We have kept the expenses
on government and defence flat this year.
ON UNEMPLOYMENT: The overall unemployment
is around 10 per cent, which is worrisome. We have to create employment
in the non-traditional sector. We are spending $5 billion on the new economy.
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