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Experts hoped new policy may post sound economic revival

ISLAMABAD: Upfront implementation of bitter recipe prescribed by the government is expected to provide much needed shot in the arm, posting long awaited economic turnaround in a foreseeable future.

The proposed economic decisions will shift economic burden on the affluent class and pass on benefits to hard pressed segments, economic analysts said.

"New Economic Order", set out by the government is strongly hoped to round up the drifting propensity in different sectors of the economy besides retrenching expenditure, analysts observed.

Documentation and de-dollarisation of economic fabric will help strengthen the economic sinews of the country, yielding ground to gradual upbeat performance of economy, experts stated.

Chief Executive General Pervez Musharraf while unveiling his economic revival agenda on December 15 last said "our main focus is to generate economic activity through developing investor's confidence which is intended to be achieved by ensuring stability and continuity of policy and thus attracting resident Pakistanis, overseas Pakistanis and foreign investment.

"Primary emphasis will be the development of a self-reliant economy. This does not mean autarky or the absence of borrowing. Rather our borrowing should be for productive purposes", he aded.

Major economic indicators inherited by the present government were visibly hovering in the red, experts said. Drastic and revolutionary overhauling instead of mere tinkering is needed to repair the crumbling economic structure.

The economic managers are unable to divise any major improvement in economic scenario in the short term, however they are proceeding in the right direction for swift economic resurgence, they maintained.

The economy which descended to tailspin following International Power Projects (IPPs) issues and freezing of Foreign Currency Accounts (FCAs), cannot stage any robust upturn, but the policy measures will possibly help check withering economic trends besides underpinning the existing economic plight.

Discontinuation of FEBC, FCBC, abolition of whitener schemes, levy of tax on money in FCAs, withdrawal of withholding tax on savings schemes, linking of fuel prices with international oil prices and deregulation of petroleum sector are the salient policy decisions, geared to pull the economy out of the woods.

Privatisation programme would be reactivated setting strategic assets aside the programme and it would be ensured that privatisation proceeds were utilised exclusively for retiring national debt, the chief executive indicated in his economic revival programme.

"At the centre of national rebuilding efforts is promotion of a culture of tax compliance, we will come down very hard on tax evaders as well as on their abettors in this crime. We have resolved to lay foundation of a completely documented economy where the cost of tax evasion will be very high", he added.

"A number of taxes in force at present would be phased out gradually. We are attempting to turn a situation of adversity into an opportunity which is a great challenge", he stated.

This time decisions will pinch the rich without passing major burden on to the poor, experts hoped adding the new approach will certainly check any possibility of economic meltdown in the wake of burgeoning debt burden, yawning trade gap and drifting balance of payments position.

Measures will outpace descending trends in the economy, putting much needed steam in the engine of economic turnaround, analysts maintained continuing, economic prospects are locked in uncertain and inhospitable climate which can however be reaped by the country after impact of radical decisions on economic fronts, analysts maintained.

Bearish prospects of foreign investment will be outweighed by aggressive economic strategy envisaging solution of IPPs issue and implementation of GST across the board, analysts say.

Untiring efforts are required to dismantle economic impasse as short lived cushion will be wilted and withering economic atmosphere will continue to make inroads unabatedly, they observed.

New economic team can better nurse the ailing economy and will succeed in bottoming it out from a deep quagmire, experts stated further saying, the economic managers should factor all obstacles and dilemmas in their approach they would be facing during implementation process. APP