LAHORE (December 23 2006): Advisor to Prime Minister on Finance and Revenue, Dr Salman Shah has said that there will be no victimisation for the stock market crash but action would be taken under the rules and regulations against those involved in the stock market scam.

He said this while talking to newsmen on Friday after addressing the 4-day 22nd Annual General Meeting and Conference on Governance and Institutions organised by Pakistan Society of Development of Economists (PSDE) and Pakistan Institute of Development Economics, Quaid-e-Azam University Islamabad.

Talking about delay in ongoing proceedings on the March stock market crash, Salman said that detailed investigations are underway and responsibility would be fixed against the delinquents.

To a question on the reported outflow of foreign investors recently, the advisor said that there could be multiple factors for this. Long holidays on account of Christmas and New Year and year-end of most of the companies could be one main reason. However, the new risk management system might have forced the foreign investors to repatriate their earning from the stock business because the investors would prefer to analyse pros and cons of the new system and hopefully they would take fresh positions later.

As a result of globalisation, Salman said negative impact on stock market in one country leaves negative impact on the bourses of regional countries. Once Bombay stock exchange and Pakistani bourses registered sharp decline while restriction on currency by the Thailand government also upset the regional stock markets, he maintained.

When asked about cut in petroleum prices, he said, "We are facing revenue deficit of Rs15 billion and only could slash the prices, if prices in international market goes down. We had projected the budget deficit of 4.5-percent and in case we lower the oil prices without achieving revenue target, it would not only reflect management failure but also negatively affect Pakistan's credibility on credit rating agencies. We are persistently being monitored by the credit rating and donor agencies as well", he maintained.

The oil prices in the international market are 'unpredictable' which first fell to $58 and then rose to US $63 per barrel, he added.

To a question, he maintained that there was no energy crisis in the country and we are just managing the energy use. However, the energy conservation is inevitable for the growing economy like Pakistan, he added.

Responding to a question regarding rise in the prices of eatable items, he said that onion and potato crops were badly damaged in the country. Secondly, the crop of onion reached very late in the market creating crisis-like situation. But the government immediately responded and allowed free import of onion from India.

The sugar prices have declined and now it is available at Rs 26 per kg in the utility stores.

Earlier, addressing the conference, Salman Shah said that the Goldman Sach recognising our economic growth has included Pakistan in the group of N-11 countries including Indonesia, Turkey, Mexico and Vietnam which have potential and would likely to grow rapidly.

Pakistan economy is growing within the range of 7-8 percent that is an encouraging sign.

There is 55 percent youth in Pakistan's 160 million population which could play a vital role in the country's development', he said. He, however, stressed on the need for integration of production and market so that economy could improve further.

Copyright Business Recorder, 2006