Manufacturing-friendly policies urged for persistent growth

LAHORE: Sustained growth is still attainable in Pakistan provided the thrust of government policies is focused on agriculture, manufacturing and infrastructure sector, speakers at a discussion program said.
Progressive farmer Hamd Malhi said the stagnation in agriculture is due to poor infrastructure, collapse of agriculture extension system and decline in public investment in agriculture, irrigation and fragmentation of land holding.
Instead of public appeasing policies that carry no substance the government should raise farm productivity by raising the quality of inputs, improve supply chain management and market linkages. He said optimal and sustainable use of land should be assured with right pricing of water and power.
Industrialist M I Khurram said most manufacturing sectors in Pakistan have the potential to grow in double digits on a long term basis. The industry needs an enabling manufacturing policy that assures simple clearance and approval mechanism. He said the policy should encourage green manufacturing technologies as the industry needs appropriate infrastructure and flexible labour laws that do not compromise the social security of the workers.
The job creating sectors should be strengthened through enabling government policies. These policies should be formulated to facilitate, apparel sector, consumer durable sector and construction sector, he said, adding that only one percent growth in entire manufacturing sector would create five to 10 million jobs.
Software engineer Saad Bin Tahir said that the service sector has shown robust improvement in recent years but there is a need to take this sector to the next level and eliminate informality from it. To achieve it, the government would have to take measures that enhance FDI participation in selected areas of services, he added.
He said steps should be taken to improve the viability of the informal sector in services and taxes in service sector should be rationalized.
Infrastructure expert Mohsin Syed said for roads and highways government would have to improve dispute resolution mechanism for constant development. For power sector, there is an urgent need to push distribution reforms in the power sector through privatization of all power distribution companies, reduction in AT&C losses and peak load management.
Syed said the civil aviation needs timely policy intervention for settling the issues regarding airport infrastructure, provision of space for establishment of MRO facilities and rationalization of high sales tax on Aviation Turbine Fuel (ATF). The government should corporatize major ports and improve port evacuation facilities for improving port connectivity.
Economist Faisal Qamar said the central bank should keep a vigilant eye on inflation. Current inflation has been tamed due to external factors but the huge budget deficit is a constant threat to inflation and the government would have to work in a tandem with the central bank to streamline its policies in line with inflation trends.
He hoped that the policy makers would observe global economic development and the turmoil and instability in European Union would not be allowed to impact the growth. In current volatile scenario, it would be advisable to reduce our dependence on foreign inflows, he added.
Qamar said the central bank would have to play its role in preventing volatility in the currency market. He said for the first time in history two of the strongest global currencies are moving in opposite directions creating issues for developing countries that trade in both.
‘The need to diversify our trade in products and markets cannot be ignored,’ he said, adding that countries trading in number of products across globe are better equipped to withstand uncertainties in global markets.