ISLAMABAD: A panel of economists on Teusday submitted an interim report on macroeconomic stabilisation to Prime Minister Yousuf Raza Gilani. The report notes that there are accumulated imbalances in the form of trade and fiscal deficits that need substantial adjustment, or else, the currency would depreciate further.

On the occasion, the prime minister reiterated his government’s resolve to restore macroeconomic stability and to rebuild the confidence of investors, both domestic and foreign. “At the same time, it is essential that any stabilization programme that we adopt provides an adequate potential for the poor and vulnerable,” he said.

Chairman of the panel of economists Dr Hafeez Pasha presented the interim report to Gilani. The panel was constituted by the Planning Commission in September this year to suggest a short-term stabilisation package to restore macroeconomic stability in the country.

Adviser to the Prime Minister on Finance Shaukat Tareen, Minister for Planning and Development Makhdoom Shahabuddin, Deputy Chairman Planning Commission Salman Farooqi and Minister of State for Finance Hina Rabbani Khar were also present in the meeting.

Gilani said he wanted to assure the donors and Friends of Pakistan that the country had the capacity to manage external resources efficiently and effectively. “Measures and mechanisms will be reinforced to ensure cost-effectiveness and high productivity of foreign-funded projects in a transparent manner,” he said.

Gilani said he looked forward to receiving the final report of the panel, which should address structural weaknesses of the economy and describe a medium-term framework for sustainable growth.

He said as Pakistan had an agricultural base, it would be important that the panel’s recommendations address the needs of the agriculture sector, which could become a leading factor of economic growth. “We, however, do not underestimate the importance of other sectors of economy,” he said, adding: “We will have to formulate our policies for the progress and prosperity of the poor.”

The prime minister lauded the Panel of Economists, the Ministry of Finance and the Planning Commission for their contribution in the formulation of the interim report. He said the report would assist the government in drawing up a home-grown economic stabilisation programme, which was being finalised. He said the findings of the report would also help the country’s economic team in their negotiations with the donors and multilateral institutions.

Gilani said he was happy to note that the report contained his suggestion that the stabilisation programme should be both efficient and equitable.

Shaukat Tareen briefed the meeting about the government’s nine-point economic plan and said its implementation would be overseen and reviewed by a policy board co-chaired by the president and the prime minister. He said the policy board would consist of representatives of the government, members of the Planning Commission and experts from the fields of economy and social sciences. ìAn executive committee will work under the board. Each committee member will head a group working on various subjects of the economic plan,î he added.

Shaukat Tareen said the plan had been prepared with the input of politicians and the private sector. He said social protection, agriculture, industrial competitiveness, human resource development, integrated energy plan, strengthening of capital markets and private-public partnership were the main areas of the plan. ìThe Finance Ministry will be monitoring the economic plan on a monthly basis,î he further said.

Dr Pasha said the panel was of the view that Pakistan must take decisive measures to restore macroeconomic stability. He said that the recommendations in the report were based on economic mobilisation, privatisation, an integrated economic package and social safety nets.

The panel proposed the mobilisation of domestic resources and cut in expenditure besides a privatisation programme aimed at efficient utilisation of domestic and external resources.ìThe economic strategy will focus on sustainable and equitable economic growth, putting in place effective social safety nets to protect the vulnerable and poor sections of society,î he added.

He said the proposals in the report would help spur agriculture growth, address sub-regional inequalities and promote cross-border regional trade, especially with China. The panel stresses on institutional reforms such as distribution of state land to the landless and tenants and provision of credit to small entrepreneurs so that they could become equity holders in the mainstream fields such as dairy, livestock, fisheries, processed food, telecommunication, apparel and software.

Dr Pasha said the interim report also reaffirms the process of devolution and fiscal assignments between the federal and provincial governments, especially about the capital value tax and GST on services.