Role of financial sector in economic development highlighted

Institute of Cost and Management Accountants of Pakistan (ICMAP) organised a conference on "Role of Financial Sectors in the Development of Economy" to celebrate 60th anniversary of the institute. The event was held on the occasion of "Management Accountant Day".
In his keynote address, Syed Sardar Ahmed lauded the efforts of the institute for showing professional commitment towards providing learning opportunity not only to its internal stakeholders but also to executives, professionals and decision makers. Yaseen Anwar, Deputy Governor State Bank of Pakistan (SBP) said the financial sector, with its unique business model and being the largest in the world in terms of its earnings, which plays a pivotal role in accumulation of financial capital and spreads it optimally across a spectrum of investment opportunities to generate the best returns. This is the primary role the financial sector plays in the development of an economy. In order to play a meaningful role in the economic development of the country, the financial sector is facing many challenges, which among others, include the following:
1.Going forward, it is crucial that we explore and understand new industry trends, blend our business process with new technologies, and offer new products and services to fulfil the changing needs of both corporate and individuals.
2. Given the level of financial globalisation it is imperative to dynamically adjust the domestic financial system to international standards so that it remains efficient and competitive. For that we need to make our regulatory framework flexible, upgrade local laws in accordance with international best practices (eg adoption of Basel III), ensure adequacy of contract enforcement mechanism, and increase disclosure for enhancing transparency and predictability of economic policies.
3. Based upon our understanding that the financial sector plays a critical role in economic development, it is very important to increase outreach of financial services in two targeted domains:
a) First, take measures to enhance financial inclusion in the country by creating appropriate incentives for financial institutions to extend credit to SMEs and increase their outreach to the poor. SBP, as a regulator, is undertaking every effort to provide them an enabling environment to achieve this objective.
b) Second, promote Islamic financial industry as a viable model both for the shareholders and borrowers who want to enter in faith-based financial transactions.
Dr Amjad Waheed, Chief Executive Officer, NBP Fullerton Asset Management Limited said that sustainable economic growth is not possible, unless substantial resources are allocated to productive factors. Had Pakistan's GDP per capita increased by the same rate, each Pakistani today would be earning 6.0 times of what he or she is earning today.
Mohammad Hanif Ajari, Vice President ICMAP, in his presentation pointed out that the best way to revive the economy was a sovereign industrial policy that may ensure tax and other incentives for a period of five to six years. He further suggested the setting up of a "real one-window operation" to facilitate investors as the "good work done by one department is often spoiled by counterproductive attitude of some other department".
In the short term, growth is not possible, he said, without lowering the interest rate. He stressed the government to use the services of Cost and Management Accountants as they are architect of adaptive Management.