Minister for State for Finance Umar Ayub Khan has said that Prime Minister Shaukat Aziz would soon announce vocational training and skill programme in order to develop our human resources, which was a vital national asset. While addressing a luncheon hosted by Insurance Association of Pakistan (IAP) here on Wednesday, Umar said that to sustain current pattern of economic growth and meet the future challenges it was imperative to invest in human resource development and our future lies in it. At present, 150,000 workers were being imparted training at various technical institutions annually and this figure would be enhanced to 300,000, he added.
He was of the view that our economy was based on agriculture, manufacturing, services and natural resources, and its growth was linked with the human resource development.
He further said that the government was also focusing on the development of rural areas in order to bring them at par with the urban areas.
"The government has also decided to set up a Khushhal Pakistan Funds under which Rs 1 billion per annum have been allocated for the uplift of rural areas. The funds would be spent to build rural infrastructure, electrification and supply of gas," he mentioned.
Apart from this, he said, the government was working on education, health and provision of clean drinking water, which was essential in the development of human resources, he added.
According to him, the health of insurance industry in Pakistan was also linked to agriculture, manufacturing, services and natural resources, as these sectors perform well, the insurance industry would also perform well.
However, at present the insurance sector was under performing due to the fact that they lack co-ordination among the existing insurance companies.
He was of the view that insurance companies should evolve one policy that was acceptable and binding to everyone.
Regarding the problems being faced by the Insurance industry, he proposed that as a first step co-ordination should be developed among the insurance companies and draft problems faced by the industry with consensus.
"After return from Turkey, I would arrange a meeting between the insurance companies and the State Bank of Pakistan (SBP) Governor, CBR Chairman and Securities and Exchange Commission of Pakistan (SECP) Chairman," he said.
"Through a dialogue they would have an opportunity air their apprehensions in the relevant quarters, but with a condition that they come with an agenda based on consensus and whatever was decided in the meeting should be acceptable to all," he added.
Umar was of the view that many mega projects, including related to oil, gas and coal, were coming to Pakistan and they all require insurance, thus the insurance companies would get a boost.
He pointed out that the insurance companies in Pakistan had ignored the agriculture sector, which constituted 24.5 percent of the GDP and was growing.
"Similarly, they have shown reluctance to go into the small and medium enterprises and industries, which also were sizable constitution of the GDP. Hence, operational income of the insurance companies has decreased over the years and they have no one to blame but themselves for ignoring vital sector of the economy," he said.
"They have to change their mindset as did the banks and extend your services to them and at the same time contribute in its development," he urged.
According to him, Pakistan lacks regional companies of world class and financial institutions, especially the insurance sector, could play a big part in its development.
Moreover, the insurance companies must induct professional people with professional qualification, as simple degrees were not more sufficient for the growth. In a crux, the Insurance industry lacks people with technical competence.
Admitting the reality of price hike, he explained that due to increase in demand for everyday goods, caused by increase in purchasing power, there was surge in the prices.
He said that this was positive sign that reflects improvement in the economy while the farmers were benefiting.
"However, Price Review Committee has been set up under the leadership of Dr Salman Shah, Advisor to PM, which would review the price trend. It would decide, if required, of importing everyday goods to fill the demand gap and control price hike, while profiteers would not be spared," he added.
Later, while talking to newsmen, Umar admitted that there was a pressure on capital market, however an understanding has reached between the SECP and stakeholders, under which, the SECP has given them time till August 26, to phase out COT.
About his upcoming visit to Turkey, he said that he is attending Asian Development Bank (ADB) board of governors annual meeting.
He added that the Bank had done a lot in Pakistan and providing financial assistance to the tune of $1.2 billion per annum for various projects.
"Moreover, the World Bank mission has committed to invest $1.5 billion per year in different projects in Pakistan, including infrastructure and human resource development," he added.
IAP Chairman Saifuddin N Zoomkawala and IAP Vice-President Arshad Rana also spoke on the occasion.
They voiced the concerns and apprehensions of the insurance companies and sought support of the government.
They said that the Insurance industry was going through a crucial time, despite facing ups and downs, however it has now stabilised. They further said that human resource development was essential for the growth of this vital sector and asked the government to help in imparting training to people of insurance sector.
They also demanded that a criteria of enlist and delist of companies, practised by the commercial banks should be set, as right now it was being done at the whim of the banks, which was creating problem for them.
"Many companies were enjoying Capital Gains tax exemption, which should also be extended to them, as they depend on investment income that was taxed while their profits have shrunk after 9/11 incident," they added.
They pointed out that they were not permitted to set up a separate one-window for Islamic insurance on the pattern of commercial banks, and demanded a similar option should be given to them as well.