Revenue collection does not match with GDP ratio

NEW YORK - Finance Adviser to the Prime Minister Shaukat Tarin hopes to bring inflation down to single digits over the next year as he asserted Tuesday that government measures have put Pakistans economy back on track despite security-related challenges.
Participating in a discussion at Asia Society in New York, he said the coordination of fiscal and monetary policy has led to considerable reduction in inflation from a high of 25 percent in October 2007 to less than 15pc in May 2009.
We have put in place a strategy for stabilising key macroeconomic indicators, said Tarin, who was the keynote speaker at the discussion on The Future of Pakistan: Economic Recovery and Competitiveness.
Tarin said Pakistans economy has been badly hit by the war against Taliban militants, having spent $35 billion since 2001. The economic cost of the war against (Taliban) insurgency and terrorism has been enormously high, he said.
In terms of human cost, he added, the war had displaced 2.5 million people, while thousands of civilians and security personnel have died. Although the international community has contributed, Pakistan is bearing a major portion of the rehabilitation, reconstruction and security costs.
Referring to the nine-point agenda for economic and social recovery, the Adviser said the key point was improving the international competitiveness of Pakistans industry and economy in which the country has lagged behind. Pakistan, he said, was taking the necessary steps to make the economy competitive both at micro and macro levels and cited some factor that gave rise to optimism.
Pakistan is one of the largest countries with a growing population;
Major new global investments in transportation and energy infrastructure are underway that will position Pakistan as a key trade and investment hub linking the Middle East, South Asia and Central Asia with Gwadar post creating a new economic corridor;
Pakistans young population, if managed well in their most productive years, will create a demographic dividend, boosting the GDP;
Blessed with a rich natural resource base, Pakistan has every potential to do well, with its five rivers providing immense agricultural potential;
Pakistan will join countries such as China in becoming one of the worlds great workshops in manufacturing and industry.
The Adviser expressed concern over the revenue collection and said it does not match with the GDP ratio. He said its performance level is very low that needs broad-based reformation. He said tax net was being expanded and other potential sectors of the economy, including hitherto 'no-go areas such as agriculture, would be taxed. In doing so, were not going to get scared, he added.
Poverty was being head-on, he said, citing Benazir Income Support Programme (BISP) that provides safety net to the countrys poorest. Pakistan, he said, would also be reforming its economic and financial institution, such as the Planning Commission which in the past enjoyed a great reputation, with people like M.A. Ahmed and Dr. Mahbul Haq in it. Earlier, Arthur Bayhan, CEO of the Competitiveness Support Fund, a joint US and Pakistani initiative to reset the Pakistani economy, paid tributes to Tarin for his efforts to pull the country out of the financial crisis.
Kavin Murphy, a leading expert on national competitiveness, said he remained hopeful of Pakistans future, predicting that better days were in store for the country. What needed was mobilisation of political will and to get people moving in one direction - strengthening the country. Murphy said apart from reforming the public sector, the govt must also encourage reforming the private sector and build stronger public-private sector cooperation to make Pakistan strong and prosperous.