20000321

Seminar speakers

identify factors

affecting savings rate

RECORDER REPORT

KARACHI: A seminar on 'Savings and Investment: Avenues and Aversion' observed unanimously that the main cause of poor savings was the spending beyond means.

The seminar, which was organised by the 'Investment and Marketing Forum', was inaugurated by the Business Recorder Editor M A Zuberi. The session was chaired by a former Governor of the State Bank, V.A. Jaffery and was conducted by Prof H B Hassan.

Zuberi identified the factors affecting the savings rate which is one of the poorest in the world. He said that the main reason for the low rate of savings was the nation's consumption habit 'which is a heritage fault'.

He said that the nation 'is living beyond its means'. However, he said, that the rulers were also responsible for poor savings.

He said that rulers of a heavily indebted nation were maintaining lavish life style which certainly encouraged the middle class to follow suit.

'Decline comes from the top', he said and expressed disappointment that there was no encouragement even from the banks and financial institutions for improvement in the savings rate.

We need to work on national level for the increase in saving rate as it is no use to talk about investment without saving.

He stressed the use of media for education of the general public to improve their savings. He advised the banks to mobilise people for improvement of the saving rate.

Dr Anjum Siddiqui, spokesman of the Hub Power Company, presented his paper and covered many factors involved in the low saving rate. He explained that where the people should focus for jump-starting the economy.

Saqib Sherani, Chief Economist at ABN-AMRO, in his short paper, discussed the various aspects suggested measure to improve the economy and identified the factors causing damage to the growth.

V.A. Jaffery addressed the session towards conclusion and endorsed the opinions of the speakers.

The Second Session started with the keynote speech of the World Bank consultant, Dr Pervez Hasan.

In his paper he said that the poor saving rate was not the only factor in the low growth of the economy. He identified symptoms causing decline in the growth.

He said that more than two percent foreign direct investment was not desirable as it has its own cost.

He said that Pakistanis new economic team should be judged not from the short term achievement but from the restoration of confidence of the local and foreign investors.

He also stressed for adequate investment in the development of the human resources. He supported the idea to cut the defence budget and more spending on the development side.

He said that even the investment of private sector was not adequate.

He said saving rate was double in India despite low income and low purchasing power of the Indians.