Donors called for greater role of the private sector in economic development, in general, and infrastructure, in particular, through public-private partnership.
The speakers at the Pakistan Development Forum (PDF) hinted at overheating of economy and cautioned that without augmenting share of private sector and infrastructure development, it is hard to sustain high economic growth.
Speaking at the concluding session of two-day Pakistan Development Forum here on Thursday, the donors proposed the government to increase public-private partnership in their development programmes and give more heed to infrastructure development.
World Bank Vice President for South Asia Praful Patel stressed upon the need to form a coherent strategy to attract private sector investment in infrastructure development. He said that despite financing from the International Finance Institutions (IFIs) and the government, the resource gap in infrastructure was substantial and could only be bridged through private sector funding.
Besides, he said Pakistan should give priority to human development and enhance spending on social sector. Poorest of the poor should be educated and have access to health facilities. Women, the poor and marginalised should be brought in the economic mainstream.
Central and West Asia Department of Asian Development Bank (ADB) Director General Juan Miranda also stressed upon the government to increase public-private partnership in the economic development activities.
He said that if the government wants to sustain high economic growth, it should develop human resources by enhancing spending on social sector, particularly education and health.
The US delegation in their concluding remarks applauded the government's aggressive steps in promoting private sector-led development. They said, "We share the vision and commitment to building a progressive, modern, prosperous and democratic state."
The World Bank and Asian Development Bank being the big development partners of Pakistan have also shown interest in supporting the process of public-private partnership in infrastructure development and other economic activities.
Representatives from the Japan International Co-operation Agency (Jica) showed concern over the issue of land bubble, which is promoting speculative trend in the economy.
Besides, they also pointed towards the declining employment elasticity in the country and said that Pakistan's Medium Term Development Framework (MTDF) 2025 does not give direction to employment generation.
They proposed that the government should publish land prices and ensure that loans taken from the commercial banks are used for building structures to kill speculation.
The European Union (EU) also pointed out that corruption was a serious hurdle in the mobilisation and allocation of resources in Pakistan. It also noted that transparency and accountability of the government interventions remains crucial issues to be addressed. Besides, it said that education was crucial to equal opportunities for everyone and, thereby, also to economic and social development.
The donors said that economic growth is interrelated to poverty reduction and without attaining high and sustainable economic growth poverty reduction is not possible.
APP ADDS: Adviser to the Prime Minister on Finance and Economic Affairs Dr Salman Shah on Thursday said the development partners have assured continued financial and technical support to the government's pro-poor growth strategy, with a strong conviction that economic growth plays a vital role in poverty reduction.
"All the development partners are unanimous in their view that sustained economic growth is vital for poverty reduction," Dr Salman Shah told a press conference here after the closing session of a two-day Pakistan Development Forum (PDF).
Minister of State for Finance Omar Ayub Khan, Minister of State for Economic Affairs Hina Rabbani Khar and Economic Affairs Division (EAD) Secretary Khalid Saeed were also present on the occasion.
Salman said the government would have to carry forward its pro-poor strategy, along with sustained economic growth so that the life of common man improves with better health and education facilities through sustained economic efficiency.
He said the development partners are fully supportive of the government's second-generation reforms aimed at strengthening the economy, consolidating what had already been achieved and modernising its infrastructure requirements, etc.
The adviser said the donors assured their full support through financial and technical assistance as well as consultation services and expertise to the government in achieving the goal of economic progress and prosperity.
He said the second-generation reforms focus on strengthening and modernising the economy and make the country competitive in the world through significant improvement in infrastructure, services, capacity building, human resource development and other areas of life and economy.
Giving details of the two-day deliberations in various sessions of the PDF, the adviser said the participants held in-depth discussions on various important areas of socio-economic development with focus on increased private sector role.
He said the discussions focused on competitiveness of economy, strengthening of Small and Medium Enterprises (SMEs), human resource development, environment, social sector development with safety nets for vulnerable segments, poverty reduction, infrastructure, energy and water requirements, etc.
Praful C. Patel said the World Bank's assessment of Pakistan's economic performance is impressive and positive with higher growth rates over the last few years.
He said the PDF had the right agenda for next generation reforms and the broad range participation in the PDF, including the world-class private sector people, was impressive. He reiterated the World Bank's commitment to work with the Government of Pakistan on the agenda of economic growth and development.
Juan Miranda said improvement in macroeconomic fundamentals with high growth would contribute to poverty reduction.
He stressed for sustainability of this economic growth over the coming years to realise economic development and prosperity through second-generation reforms. The ADB director general also assured the bank's continued financial and technical assistance to Pakistan.
To a question, Salman said the government is committed to attack poverty through sustained economic growth and development, as the recent survey also shows poverty level coming down to 25.6 percent from 32.1 percent.
But, he added, the rate of poverty was still high as 25 percent of our population was living below the poverty line, which is not at all acceptable and was a challenge for the country and nation.
He, however, maintained that with macroeconomic stability achieved through reform process the country has found a direction.
Under the Millennium Development Goals (MDGs), poverty would be reduced to half of the current level by 2015, he said, adding, "If we continue on the path of sustained economic growth, we will achieve this goal even before 2015."
He said higher inflation rates were mainly because of increase in oil prices in the international market, which also compelled increase in commodity prices.
He, however, added that the average inflation has come down to 8 percent this year from 11.2 percent of the previous year, with 6.5 percent and 6 percent targets, respectively for the next two years.
Salman said a new Competitive Authority would replace the existing Monopoly Control Authority in June this year to check cartels and monopolies in various industrial sectors.
He said Pakistan needs to build more water reservoirs on fast track basis to meet its energy and water requirements, particularly for agriculture sector, which has a major 25 percent share in the GDP.