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WITH a splendid course — Pakistan has successfully embarked upon its cherished programme of debt repayment by remitting hefty $ 1.171 billion to Asian Development Bank [ADB], retiring earlier-than-schedule it’s most expensive debt that carried an interest rate of 8-11 per cent.

As the Finance Minister Shaukat Aziz says; the country intends to pre-pay a minimum of another $1 billion foreign loan during the current calendar year — one expects that such a leaning would not be at the cost of the poor masses — faced with a lot of problematic settings.

At the time — the Government unfolded a debt reduction strategy declaring not to get more loans from IMF and World Bank with stringent conditionalities and also to pre-pay the costly debt; very few believed that the country would be able to achieve the goal.

Though there were clear signs of perfection in the financial health of the country, many suspected that it was a momentary phenomenon.

However, the actual payment of the debt ahead of schedule, saving $ 300 million in interest payments, shows that the country was now in a position to manage its debt obligations in a satisfactory manner.

Debt burden had assumed alarming proportions and the issue had become number one priority of the Government as debt service requirements resulted in a growing fiscal squeeze, which in turn led to a declining proportion of GDP being spent on development and social sectors.

Falling public investment, together with unsuccessful attempts at macroeconomic stabilization also adversely affected private investment.

So total foreign debt and foreign exchange liabilities that stood at $ 38.5 billion slowed down the process of development and became one of the major causes of increasing incidence of poverty.

It is, therefore, heartening that the debt is expected to come down to $ 33.5 billion on June 30 — 2004 and the situation would improve more as the Government has a target to pre-pay a total of $ 4.5 billion foreign debt by 2007.

Pre-payment of expensive debt and rescheduling of debt by almost all donors (and in some cases its write-off) have brightened the prospects of increased economic activity as the Government would have fiscal space to spend more on development.

This is not an elfin achievement as a few years back; the country ran from pillar to post — due to bad fiscal policies and plunder of pounds by some sets of politicians [I mean in the shape of bulky bank loans] — eventually with begging bowl to get even small amounts of loan from donors.

There is no denying the fact that people of Pakistan paid a heavy price for these loans – ever increasing charges of utilities, price hike of items of daily use, poverty, and unemployment.

Hats off to grandiose economic managers, so nicely led by Finance Minister Shaukat Aziz, who — in the long run — devised visionary policies to bring about a visible n’ positive change.

No doubt, President Pervez Musharraf was the driving force behind all these efforts as he provided the required congenial atmosphere — the political stability and friction free foreign policy.

We are optimistic on still more boost in over-all law and order situation, which would give optimal impetus to the zest for acceleration to our march on the road to peace, progress and prosperity — of-course with dignity n’ honour — if the versatile n’ robust fiscal policies remain intact.

Simultaneously — with such a fabulous achieve, we hope that the Finance Minister shall take into account a few vital requires of the people — to seek more allures vis-à-vis his elegant outlook in the new budget — for the year 2004-2005 by giving them a breather in the shape of multiple concessions — which can get the masses bailed out of the nuisance of price-hike.

The most deserving set of the people of this realm are the senior-citizens, a fact — well acknowledged all-over the world.

Yet — in Pakistan, this class is and has been facing a lot of financial setbacks — with enormous perils.

Majority of these human-beings — irrespective of the gender — is composed of retired or handicapped souls, who have placed their life-long savings in diverse savings schemes.

Till recent years, every budget has been giving them a big financial jolt — in a way a tremor. Not only that they are compelled to face the ghost of swelling costs of items to survive — the residue of their investments — is also going on decline — with the imposition of multiple taxes in the silhouette of withholding tax n’ forcible deductions of identical style.

With harsh reduction in the annual interest on investments — both by the nationalized n’ autonomous banks — to a meager size of just 1.25 percent from almost 9 percent until the recent past — the only ray of hope for these poor people — with no regular income at-all — via the National Saving Schemes is also getting downward at a swift pace — all most every-year.

As a result — the leaning of investment with National Savings Centres — is of of-late declined to a hefty extent.

If this course persists, we are afraid that the people — more exclusively the senior citizens — shall be left with no option but to withdraw their investments — even from the Savings Schemes, which may give a big retard to the improving economic scenario — thus evaporating almost all the accomplishments in this arena.

While lauding the zestful plans of the fascinating Finance Minister, we do hope — with confidence — with while reimbursing the longed loans of the aliens, Shaukat Aziz shall come out with mammoth limitless concessions for the elders — phrased as ‘senior citizens’ and the dismal widows — in the new budget by waiving of all types of deductions n’ taxes on their investments with the National Savings Schemes — with retrospective effect — the financial year-2000.

Such a pragmatic n’ bona fide decision would not only attract a vast volume of investments at home n’ from abroad — but would also make Pakistan healthier on its economy’s facet.

As an authority on the global economic affairs — an aromatic Shaukat Aziz — perusing the dynamic perceptions of President Musharraf [who has a grand allure for the welfare of the common man] — can, conveniently eschew the trends of placing excessive loads on the ‘have-nots’ by originating manifold alternatives — involving the affluent class of ‘haves’ to keep the national exchequer breathing — in a feasible n’ judicious way.

© 2004 Mumtaz Hamid Rao/Pakistan Times

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