ISLAMABAD: Prime Minister Nawaz Sharif has said that extremism and terrorism are adversely affecting the country’s economy.

Speaking at a meeting of the cabinet on Tuesday, he said: “Economic development is the only way forward, but terrorism and extremism are badly hampering the economic turnaround in Pakistan. The country is passing through difficult times and we are evolving a consensus strategy to sort out all issues confronting the nation.” According to an official handout, the cabinet discussed good management practices to be adopted by the government sector to make it more effective, efficient and accountable.

Idris Jala, a minister and CEO of the Performance Management and Delivery Unit, Government of Malaysia, attended the meeting on special invitation of Prime Minister Sharif.

Highlighting how rampant inefficiency, corruption and malpractices over the years had destroyed the country’s economy, Mr Sharif quoted performance of the PIA which had been causing a monthly loss of Rs3.3 billion to the exchequer.

“At present we are only dealing with day-to-day crisis at PIA. Taxpayers’ hard-earned money is being paid to PIA to bail it out of crisis and sustain itself, and this situation cannot continue any longer,” he said.

He said instead of sustaining the inefficient PIA, the money should be invested in the power sector and development of other resources. Over-employment and low-quality services had led to the downfall of the PIA, which once was the world’s best.

The prime minister directed the national airline’s management to provide a detailed briefing on the existing situation and formulate concrete proposals for reforms in the PIA.

The PML-N government had decided to sell PIA’s 26 per cent share by the end of 2014 along with transfer of its management. Its surplus employees were to be given a golden handshake and a new company – PIA-2 – was to be created to park all its current liabilities. Therefore, the PIA would be run on a competitive basis, unlike its present operations.

Prime Minister Sharif told the cabinet that during his previous tenures, the government followed the policy of free market economy which led to a faster economic growth at that time. “We have again started with the same policy with enlarged vision and increased vigour,” he said.

The guest from Malaysia shared with the cabinet his experience of Malaysian economic programmes and government transformation. He said that Malaysia transformed its economy by devising short-term plans within the framework of its larger strategic programmes, and set timelines for achieving those plans by giving key performance indicators.

The public and private sectors were involved, through a well-defined process, in devising these plans and making them achievable, he added.

Mr Jala informed the cabinet that procedures were made simple to attract investors, both foreign and domestic.

The prime minister said his government was following an economic model whereby key development sectors had been identified and prioritised. Moreover, systems were being simplified.

He said the government had prioritised economy, energy and modernising infrastructure across the country and investment in the power sector.

Mr Sharif said a team of experts was working on the reforms action plan so that Pakistan could learn from the success stories of Malaysia and replicate them here. He said: “We look forward to working closely with the Malaysian government.”

He said a high-powered delegation would soon visit Malaysia to strengthen cooperation, particularly in the economic field.

The prime minister thanked the Malaysian delegation and extended an invitation to Malaysian Prime Minister Najib Razak to visit Pakistan.