Likewise, external debt as percentage of foreign exchange earnings has declined from 347 per cent on end June 1999 to 119 per cent by end March 2007.But he said the debt in absolute terms will continue to rise because the size of GDP was also rising. “Debt is not bad but the burden of debt is bad,” he said adding that the government was maintaining a stable exchange environment because of getting the country’s foreign exchange reserves increased to over $14.5 billion which were sufficient to provide cover to more than six months of imports. He said that Pakistan needed to invest in infrastructure development to achieve 6-8 per cent GDP growth rate. At the same time, he said the competitiveness of the industry was also needed to be improved by the private sector in next 10 years. The economic advisor also said that the new micro-economic policy framework was being prepared as various targets set during the last few years have over-performed. “We were anticipating that investment rate will reach to 22.2 per cent of the GDP by 2010-11 but we have surpassed this level in 2006-07,” he said. Similarly, the government was expecting 4.5 per cent agriculture growth which reached to 5 per cent in 2006-07. “But we have under-performed in large scale manufacturing. However, we are right on the target as far as real GDP growth is concerned,” he said. “Then in terms of revenue collection we have over-performed and accordingly we have to revise upward revenue projections for the next 10 years,” he said adding that the Central Board of Revenue (CBR) was expected to collect Rs980 billion in 2007-08 but it has set an ambitious target of Rs1.025 trillion for the next financial year.

It managed more than Rs42 billion against its original target last year. “The new micro economic framework will be consistent of our growth projection and future policy thrust which we have set for ourselves,” Dr Khan said.