What is going on in economic ministries?

Source: The News

Date: 9 December 2010

ISLAMABAD: Deputy Chairman Planning Commission Dr Nadeem Ul Haq is trying hard to distance himself from approving multi billion rupees development projects today (Thursday) when the Executive Committee of National Economic Council (Ecnec) is going to accord approval of new projects.
The federal government had slashed down development budget from Rs280 billion to Rs140 billion for the current fiscal year owing to financial crunch but in view of mounting pressures from all quarters including the Prime Minister Secretariat, President House and relevant ministries, the Planning Commission was forced to convene Ecnec meeting for approving around 30 projects with estimated cost of over Rs300 billion.

“We can only give advice to the government that there is no need to increase throw forward at time of financial crunch that will result into overrun of cost as well as cause delays in completion of projects,” sources close to deputy chairman Planning Commission quoted him as saying to his top aides but he seems helpless before the political leadership of the PPP government.

When contacted senior officials of the Planning Commission said the approval of projects did not mean that the throw forward was increased because it would be included into Public Sector Development Programme (PSDP) list when the NEC would approve the next financial year development plan for 2011-12.

However, the sources said that the deputy chairman Planning Commission is persuading the government to bring about major changes in its development strategy by arguing that the growth strategy of last 63 years remained unable to deliver in an effective manner because Pakistan experienced boom-bust cycle in its whole growth trajectory. He had argued that the growth touched 6 to 7 per cent per annum but pulled back quickly to 3 to 4 per cent after one after another shock.

According to his model of economic growth, Pakistan’s growth strategy should be based on physical capital, human capital and productivity by bridging missing links of innovation, entrepreneurship and promoting markets. “Pakistan has focused more on hardware growth instead of software growth,” Dr Haq always stated.
With this new approach, the Planning Commission reduced the throw forward from 1905 projects with estimated cost of Rs3,057 billion to 1,421 projects with estimated cost of Rs2,509 billion. In order to avoid criticism, the authorities are not disclosing the cost of those projects, which will be approved by Ecnec today.

One of the most important projects under consideration is “Procurement of 150 Diesel Electric Engines” of the United States origin.

It is relevant to mention that the controversy surfaced on import of locomotives from China or USA in the recent past. When contacted a Planning Commission official said that the quality of US locomotives is better and Ecnec is going to consider approval to purchase of US manufactured locomotives. He said that ministry of railways has prepared a summary in this regard and they would pursue their case before the Ecnec today for getting approval.

Link: http://old.thenews.com.pk/09-12-2010/ethenews/t-2558.htm