Pak heading towards its major economic crisis: Ex finance minister

Washington, Dec.15 (ANI): With Pakistan engulfed by internal political turmoil and international pressure to take action against radical elements operating from its soil, it is headed for a major economic crisis, claims former Finance Minister Shahid Javed Burki.

There is going to be a drastic reduction in national growth rate - with high inflation, galloping urban unemployment and a sharp increase in poverty, he warned.

"The gravity of the economic crisis facing Pakistan has not been sufficiently recognised, considering that the country's 2009 gross domestic product (GDP) will decline to 2.5 percent and there will be a sharp fall in its rate of growth," the Daily Times quoted Burki ,as saying.

Addressing a community meeting organised by the Pakistan ambassador here, he said that "a new Asian Development Bank report forecast that there would be a two to three percent fall in Pakistan's rate of economic growth. While countries like China and India - with high growth rates - could absorb the shock, it was going to be very hard for Pakistan to do so."

For Pakistan, which is already reeling under a severe economic crisis, the situation ahead is more demanding as the monetary funds received from abroad are not enough to counter the economic crisis, he said.

"We should prepare ourselves for the coming setback. Pakistan has already received 2.5 billion dollars of the 7.6 billion dollars promised by the International Monetary Fund as loan. These infusions might provide temporary relief, but they would not help in the long run," he said.

"Pakistan is the only large Asian economy that is out of step with other Asian economies. While other Asian countries have introduced stimulation packages to generate growth, Pakistan has done no such thing. Pakistan is being advised, in fact, to cut expenditure when it needs to invest in employment generating projects," Burki added.

He suggested the country needs a comprehensive economic programme, which it should present to a group of donors, but that route has not been taken.

Alarmed at the situation, Burki noted that Pakistan needs fundamental economic restructuring.He also stressed on the need of taking into account the North American Pakistani diaspora, terming it an asset.

"Immediate action is required to create more employment in urban areas and a more serious view of the situation to be taken. At the present rate, only high growth in poverty can be expected," Burki concluded. (ANI)