LAHORE, May 5: Punjab Chief Minister Chaudhry Pervaiz Elahi has said his government is carrying out an extensive reforms agenda in the province under his Vision 2020 to sustain an annual GDP growth of seven per cent or more and create one million new jobs every year.

He was speaking at the inaugural session of the two-day Punjab Development Forum (PDF) here on Friday. The forum is being attended by representatives of the World Bank, the Asian Development Bank (ADB), the UK’s Department for International Development (DFID), senior bureaucrats, representatives of NGOs and others.

The chief minister said his government firmly believed that the only path leading to alleviation of poverty rested in taking the high road of accelerated economic growth, supported by solid and courageous political commitment. He said his administration stood steadfast in its resolve to ensure that the provincial GDP grew at an annual rate of seven per cent or more and one million new jobs were created every year.

“We understand that our ambitious but achievable goals could only be realised through an active participation of the private sector — the universal engine of growth and the biggest creator of jobs. Our government is, therefore, firmly committed to encourage and facilitate a strong and vibrant private sector led growth. We are focusing on the development of state-of-the-art infrastructure, and creation of an enabling business environment for the private sector. We are hopeful that our efforts to decrease the cost of doing business in the province and our business-friendly industrial and labour policies will allow the private sector to lead the effort at reducing unemployment,” he said.

He said development did not mean increasing income of the people alone. It also meant their empowerment through the provision of quality education and state-of-the-art health services. He said the filtering down of growth to the poorest of the poor mattered even more for the stability and continuity of the development process than sound macroeconomic policies, participatory development planning, innovative engagement with foreign investors, improved law and order situation, a vibrant civil society and supportive public service oriented society, which definitely help stimulate economic growth. “Therefore, our government has adopted a broad-based multi-sectoral strategy which is strongly grounded in the high ideals of the millenium development goals (MDGs).”

He said his government was fully committed to achieving the pro-poor MDGs that had been endorsed in the province’s poverty reduction strategy paper. He spoke at length on the efforts of the government to provide the people access to quality education and health services as well as the gains achieved in this regard. He said the government had substantially increased allocations for these sectors and evolved programmes to involve the private sector in this effort. He also spoke about the government efforts and initiatives for improving and developing the agriculture and industrial sectors of the province.

The chief minister informed the participants of the forum about the government’s initiatives for improving irrigation, road, and other physical infrastructure for sustainable economic growth and development in the province. He said the government had made big allocations for rehabilitating and modernising the economic infrastructure in the province. He also gave details of the governance reforms — financial, justice, civil service, gender reforms, etc — being carried out in the province with the assistance of the international partners.

Speaking on the occasion, advisor to prime minister on finance and economic affairs Dr Salman Shah said that time had come to give a big push to the economy through second generation reforms for further acceleration. He said Punjab would be leading the rest of the country.

He said there were some critical areas — health, education, water and sanitation, etc — that needed immediate attention of the government. He said that timeframe was very crucial for it and the Punjab government should keep this fact in mind. He said that second generation reforms and good governance issues were key to achieve any goal.

He said that the present government had been focusing on pro-people economic development. He said the reforms implemented by the federal government during the last six years had transformed the economy which was dominated by public sector. Now, he said, the private sector dominated the economy. He said the economic reforms had also minimised the role of the public sector but enhanced the private sector role in economic and financial activity and growth. He said 85 per cent of the financial sector was now controlled by the private sector at present. The situation was quite the opposite six years ago.

He said the private sector credit had gone up to Rs460 billion this year from Rs50 billion some six years ago. He said the private sector was now also investing in the ignored and less profitable areas as well. He claimed that the present government had created 5.5 million new jobs during the last few years, half of them were created in the rural economy.

Shah also claimed that the incidence of poverty had dropped to 25.6 per cent this year from 32 per cent in 2001. However, he added, the current rate of poverty was still very high because it meant that 35-40 million people were still living below the poverty line, and was the biggest challenge faced by the government.

He said that there was a need to develop market economy in Pakistan for which “we need to develop fetterless free market institutions”.

In his speech ADB country director Peter Fedon said Punjab had achieved remarkable progress through consistent economic and governance reforms as well as with the help of the private sector. He said reforms had become entrenched in the system and had led to the emergence of positive and forward-looking mindset in the province at all levels.

He was of the view that the private sector was driving the economic activity and creating new jobs in the province and added that Punjab had become a role model of balanced economic growth and development for the rest of the country as well as the region.

He said that the ADB would continue its assistance in the future for sustaining the current momentum of development and ensuring continuity of policies, which was critical for the province. He also stressed the need for deepening the reforms programme and putting in place second generation reforms on the agenda in various sectors, including education and health sectors.

He was of the view that efforts were needed to evenly distribute the benefits of the strong economic performance with a view to ensuring equitable growth in the under-privileged areas of the province. This would further strengthen the political and social momentum, which was needed to support long-term reform objectives.

He appreciated the fact that new growth and industrial centres in Sialkot, Gujranwala, Multan, Sheikhupura, and Faisalabad had emerged, adding that efforts should continue to foster business and economic activity in other parts of the province - with a particular focus on the Southern Punjab where poverty levels were reported to be the highest.

He pointed out that sustained efforts were required to cultivate and harness the potential of the private sector to continue acting as the engine of growth. “This requires the creation of an enabling policy and institutional environment, a conducive legal framework that guarantees contract enforcement, a stable law and order situation.” He said that recent gains in the education sector needed to be consolidated and expanded to have a sustained and lasting impact.

He said that ADB-assisted Punjab Resource Management Programme (PRMP) had become a flagship initiative of the Punjab government through which the much-needed fiscal space had been created to increase development spending in the social and pro-poor sectors. He said the ADB had committed to support the province through a cluster modality with a resource envelope exceeding $500 million over a five-year period.

He said the ADB was in the process of developing a new country strategy and programme for Pakistan that will be finalised by next year. He further said that it would involve extensive consultations with the federal and provincial governments and other stakeholders to establish the priority areas for the ADB’s support in the future.

In his welcome address, Punjab P&D chairman Suleman Ghani claimed that Punjab had come of age and was considered to be the best performing provincial economy in the country. He said that the overarching policy perspective and development agenda set out in the Chief Minister’s Vision 2020 served as the guiding framework for economic and social transformation in the province.

He said that the government was also giving top priority to governance reforms for ensuring higher standards of public services and improved access to these services. He said that with the assistance of international development partners, the government had embarked upon wide-ranging reforms in public financial management, civil service, institutional reforms for improved service delivery and reducing transaction costs, creating enabling environment for private sector development and reducing the cost of doing business.

He said that these initiatives had been undertaken under the PRMP, which was launched in December 2003 with the financial support of the ADB. Under the first sub-programme of PRMP, the provincial government had already retired expensive debt stock of approximately $200 million. He said that now the provincial government had entered into a new partnership with the United Kingdom’s Department for International Development also under this framework.

He said that the ADB was also supporting the Punjab government in capacity-building of the local governments through the Decentralisation Support Programme (DSP) and the Punjab Devolved Social Sector Programme (PDSSP).

World BanK country director John Wall and DFID chief Samiullah Yusufzai also spoke on the occasion.