Ishrat says current year will be tough for economy

[Naveed Yaseen]

By M Farhan Zaheer
KARACHI: Institute of Business Administration Director Dr Ishrat Husain has said the year 2009 is going to be tough for the world and Pakistan is no exception as fiscal deficits of countries are widening, which will cause more chaos in the months to come.

He was speaking at a seminar on ‘Global Financial Meltdown’, organised by the Institute of Cost and Management Accountants of Pakistan (ICMAP) here at its head office on Friday night.

Husain, who is also the former governor of State Bank, said current global recession was going to be tougher than the 1982 recession which had jolted the world. He said the banking system of Pakistan had proved sustainable as it withstood many recent shocks, which showed its strength.

“It will continue to endure current and forthcoming challenges that the global financial crisis will pose.”

The process of globalisation in the 1990s helped world businesses a lot, but now unfortunately this same interconnection of world economy was contributing to its deterioration, he observed.

In reply to a query, Husain said Pakistan’s economy had been maintaining average annual growth of 5 per cent and feeding over 170 million people on its own. “Look at your neighbouring country India, its state of Utter Pradesh with over 173 million population and over 40 per cent poverty, a misery that we never witnessed in Pakistan,” he pointed out.

“I have a firm belief in the economy of Pakistan. We have a habit of cursing the government but we should never forget that it is individual who makes the nation and the government just facilitates the nation towards progress,” he said assertively.

He cited the example of Chinese economic growth and said the people of Vietnam were working diligently on the model of ‘work, work and work’. He said litigation was almost zero in China and South Korea, which signified the importance of individual’s role in economic development.

Pakistan should support its export-based industry and supply electricity on priority basis which would in return help the common man, he added.

Hasan A Bilgrami, CEO of BankIslami Pakistan and President of ICMAP, said Pakistan was not much affected during the global financial crisis because of its low linkage with the world economy.

However, he added, banking credit was squeezed in Pakistan and that could be more problematic in the current year. “Let’s tighten your belts,” he warned.

http://www.thenews.com.pk/daily_detail.asp?id=161347