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Nawaz Sharif's manifold economic reforms seen to be paying off

From Absar Hussain Rizvi in Karachi
The fundamental economic reforms Introduced by Pakistan Prime Minister Mohammad Nawaz Sharif, soon after coming Into power, have started paying off In the form of Increased exports of the country, higher production and increasing quantum of foreign Investment In different sectors of its economy. The full Impact of these reforms will naturally be visible after sometime, as some of the projects to be established will be of long-gestation period.
The reforms comprise a comprehensive package including elimination of foreign exchange restrictions, liberal facilities for repatriation of foreign capital. cutUng to the minimum bureaucratic and procedural hindrances, privatisation of nationalised industries. tax holidays, greater availability of raw materials for
local Industries, change In the tariff structure, and a balanced trade policy.
The Impact of the reforms Is quite telling In the country's exports, where a non-tradl tional item like apparel exports fetched it US 8 500 million In six-month period July-December. 1991. almost 13 times up from the last corresponding period. As the new quota year began in January last. Pakistan is now targeting 25 per cent increase for the full year.
The export of carpets which had plunged due to fresh entrants tn the world market, has also taken an upturn. The upward trend continued during the first months of the current fiscal year when carpets fetched Rs. 2,590 (Rs. 25 equivalent to US 8 1) million as against Rs.2.110 million during the first six months of
1989-90.
In 1990 91. Pakistan's exports to EEC, Its major trading partner, Increased by 21.5 per cent amounting to US 8 1.52 million. Thus, the trade deficit with the EEC got transformed Into a small surplus. The business community feels that despite the new arrangements in EEC, Pakistan has great potential to further increase Its exports.
In 197Os, the then government had nationalised all major Industries, crippling the private sector. The measure was very harsh. The Industries were nationalised without any compensation and hardly any worthwhile section was left to them for investment, even If they had the money. The foreign capital also got soared. The Industries taken over were handed down to the bureaucrats to run. They had no
Idea how to operate a business. The result: the Industries suffered heavy losses over almost two decades and there was complete stagnation.
Prime Minister Nawaz Sharifs government decided to denationalise these industries and sell them to private sector on reasonable terms. '
Two out of five commercial banks have been privatised. Negotiations for others are under-way. So far, 45 out of 100 Industrial undertakings have been sold to private sector. while negotiations for the sale of another ten units are in advance stages. Some of the larger Industries and more profitable might be dislnvested through the stock exchange.
For the first time in the history of Pakistan and may be of any country_ a bank has been sold to the employees of the same bank. In other units also,
shares have been offered to the employees.
The domestic investment has expanded manifold in a period of less than one year. An idea of this could be had from the fact that 15 parties applied for opening the commercial banks. Four of new banks have already started operations.
Following the new petroleum policy, over a dozen new oil exploring foreign companies have got engaged In negotiations. Some have successfully concluded agreements. bringing In Investment and know-how.
The leading Islamic banking and investment holding company. Danil Ma'al Al Islam!, based at Geneva, has opened an Investment bank and already committed to Invest around three billion US dollars. part of which has already
been made available.
Leading Investors of Japan have come In a big way in different fields Including telecommunications, power and automobile. The Investors from the United States, UK. France, Italy, Belgium, Gulf states and a number of other countries are concluding deals worth billions of dollars.
The leading South Korean group, Daewoo, have invested in building Pakistan's first tell motorway costing around US $ one billion, as well as in the telecommunication network expansion.
The People’s Republic of China has Invested In building a nuclear reactor for generating 300 megawatt of power, a gigantic project which when completed would give Pakistan second nuclear power plant and reduce Its energy shortage to a great extent. China has
also agreed to invest In the exploitation of the copper mines In Baluchistan province, which has huge deposits of copper.
Some other foreign Investors have shown Interest In the shlp-bullding Industry, fertilizers, and heavy industry.
At an international conference held recently in Islamabad, participants endorsed Pakistan’s economic policy of free economy and were of the view that Pakistan now had Ideal climate for foreign investment. To quote Lee Kuan Yew. former Prime Minister of Singapore, as a result of reforms Introduced by Prime Minister Nawaz Sharif, Pakistan has become a very attractive" place for foreign Investment.
The Deputy Secretary General of Commonwealth. Peter Unwin endorsed the economic policies of Pakistan
particularly the privatisation found "strong political will to implement them."
The Economic Cooperation Organisation (ECO) comprising Iran, Pakistan and Turkey, took an Important step In Its recent summit meeting at Tehran when at the behest of Pakistan II adopted a preferential tariff regime among member countries. This would give a great boost to trade between the member states.
Pakistan has also embarked upon establishing economic cooperation with the newly-Independent Republics of Central Asia.
Thus, within a short period Pakistan’s economy has been rejuvenated and 1s poised to strike forward poignantly
(The author is the Editor of independent wire service Pakistan Press International.)