Industrial policy

FOR some months now, the government has been working on a new industrial policy that, according to Finance Minister Muhammad Aurangzeb, will encourage pro-business conditions in order to boost the pace of industrialisation. Speaking at a workshop organised by the Securities and Exchange Commission of Pakistan and the Pakistan Banks Association in Karachi recently, Mr Aurangzeb said the policy would soon be presented to the federal cabinet for approval. The reasons driving the government to frame an industrial policy framework are understandable: after years of painful macroeconomic adjustments that have seen industrial output shrink, factories close down, jobs lost and growth stagnate, the economy is showing tentative signs of stability. Inflation has slowed, reserves have risen amid a stable exchange rate and an improved balance-of-payments position, interest rates are down even if they remain elevated and the fiscal deficit is narrowing under austere fiscal policies.