The Asian Development Bank (ADB) visiting vice President Wencai Zhang said on Monday that Pakistan needs investment to move on to the higher growth of 7 percent as at present investment as percentage to GDP is very low. Addressing a news conference here on Monday, he stated that investment of private sector is very critical for driver of growth and reforms in governance, restructuring is essential to attract investment.
Pakistan needs higher and more inclusive growth, he said adding that the country also requires diversifying its exports as at present it is heavily reliant on textile sector. He said that agriculture products processing can help the country to diversify its exports. "We see the government has achieved growth financial stability, and higher foreign exchange reserves. The inflation and budget deficit have declined but real challenge for it is to how to achieve 7 to 8 percent growth from current level of 4.5 per cent. He added that current level growth is low and must be increased.
He said that we held a series of meetings with the government officials adding that he also met with Finance Minister and witnessed an agreement signing ceremony and also met with Minister for Railways and discussed how the lending agency can help the government in reforms and development agenda. "We highly appreciate the government of Pakistan for its efforts and its reforms agenda in achieving macroeconomic stability including reducing fiscal deficit, improving GDP growth and steps taken for the development of infrastructure specially in energy sector", he added. He was flanked by Country Director ADB, Werner Liepach and was visiting in connection with ADB''s 50 years partnership with Pakistan.
He said that China Pakistan Economic Corridor (CPEC) would not only benefit China and Pakistan but also play an important role in generating economic activities beyond the two countries. The project, he said, would also promote intra-regional trade besides connecting various regions for the benefit of the people of the region.
He said that this was his third visit to Pakistan and during his five-day visit, he has visited Karachi and Gwadar port and was impressed with the potential and quality of Gwadar port, but requires more investment. He said that no project has so far been specified for ADB support or technical assistance and wants clear road map for working together in the future. Currently we do not have plans but ideas and ADB has not yet received formal request from central government to finance CPEC related projects.
Zhang said that Diamer Bhasha Dam is a mega project for generation of electricity adding that ADB is undertaking feasibility regarding environment with USAID in this regard. This is a US $10 billion project as it involves huge amount. ADB is in review process. He said the government can overcome the problem of load shedding in next two years.
He said he also held a meeting with Chief Minister Sindh, Syed Qaim Ali Shah in Karachi and senior government officials in Gwadar port and discussed with them ways and means to further enhance cooperation in the field of development, supply of water and development of infrastructure in the city. The Gwadar port has great potential for the benefit of the people of Pakistan and the province. The CPEC, he said would change the real life of the people of the country through enhanced economic activities, road and railways links and transportation.
Earlier, he met with Finance Minister who shared with him the details of the current state of national economy, saying the economic reforms were on track and started to pay dividends. A statement stated the Finance Minister stated budget for the next fiscal year will spur growth in agriculture and industrial sectors and will encouraging foreign investment. This will all help in achieving the goal of inclusive growth, the Minister added.
He added the Government has in focus activation of the Pakistan Macro finance Investment Company in the first quarter of this fiscal year. He also hinted at operationalisation of Pakistan Development Fund and invited ADB to participate in the Fund. The ADB Vice President accompanied by Country Director, Werner Liepach, stated that financing for reforms in public sector enterprises has been enhanced from USD 150 million to USD 300 million. He said the ADB was pleased to finance the M-4 Shorkot - Khanewal Section Project and wished to see it completed as early as possible. He assured of ADB''s support for taking measures to revamp the existing transport and trade infrastructure for improved connectivity to steer the process of development in Pakistan. He evinced keen interest in possible financing in the Pak-China Economic Corridor Project as well as developing connectivity between Gwadar Port and other areas in Pakistan as well as the region. He said Pakistan now needed to focus on attracting foreign investment and enhancing exports to achieve the objective of growth. Wencai added that both sides could identify new areas for possible ADB financing including agriculture and development of ports.
ADB Vice President and Finance Minister witnessed the signing ceremony between the Government of Pakistan and Asian Development Bank (ADB) for a Loan agreement of US $100 million for National Motorway M-4 Shorkot-Khanewal Section Project. Department of International Development (DFID), United Kingdom also extended the grant of £ 23,480,000 (US $34 million) for the same project. The loan and grant agreement was signed by the Secretary, Economic Affairs Division (EAD) Tariq Bajwa and Country Director, Asian Development Bank (ADB) Werner E Liepach.
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