Streaming Media

Media Type

Keynote Address

Publication Date

7-16-2001

Description

Pakistan’s biggest development challenge to day is to reduce its debt burden in order to pursue a path that leads towards sustainable and equitable growth for poverty reduction. The main plank of the present government to meet this challenge is its Debt Burden Reduction Strategy popularly characterized as debt Exit Strategy. It is not the intention to stop borrowing but to borrow for productive purposes, use the loans judiciously, contact them at soft terms and reduce the overall burden of debt in relation to income. The idea behind this strategy is to reduce reliance on International Financial Institutions (IFIs) for balance of payments support. A question therefore arises : What are the factors that will determine whether this strategy is going to be successful or not. I would submit that at-least five major factors --- initial conditions, nature of reforms and policy framework, institutional capacity, external environment and the response of private economic agents -- will largely determine if this strategy will succeed or not.

Notes

Address at Mahbub ul Haq Memorial Seminar held at Islamabad on July 16, 2001

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