‘(But) If we don’t work hard and keep fighting among ourselves, then 2010 is also not going to be different from 2009-10,’ the former SBP governor said. — AP/File
KARACHI: The Dean and Director of IBA and former Governor State Bank of Pakistan, Dr. Ishrat Hussain has said that after experiencing 2009-10 as tough period economically, the year 2010-11 might bring economic relief.
He was addressing the members of Rotary Club of Karachi during which he eloquently spoke on the topic of ‘Economic Global Recession: How Deep and How Long?’
The Dean of IBA analysed the global financial crisis and said that it turned into an economic crisis and the world economy did not go according to predictions and all the super powers were affected, which was unprecedented.
He described financial system as the backbone of economy and said that was why the financial crunch brought the economy down affecting US, UK, Japan, India, Asia—all going down with decline in economic growth.
He said if our exports have declined, it has been due to our own economic mismanagement, particularly due to energy problems. But now the country is going back to economic management and while 2009-10 is going to be a tough year, 2010-11 is going to show relief as are the indications from Europe and US.
He did caution that the recovery would require political stability.
‘If we don’t work hard and keep fighting among ourselves, then 2010 is also not going to be different from 2009-10,’ he predicted.
He pointed out that the main cause of economic collapse was because banks took extreme risks and sold them on to other financial institutions.
The US being a consumer society was living on credit and lack of savings and it was China which backed the US reserves. He said China is now backing the dollar against the Euro and sterling, otherwise the US dollar would have suffered.
Dr. Ishrat Husain said that Pakistan’s banking was not affected as much as it adhered to its stringent laws as did other countries, such as India.
It may be recalled that Dr. Ishrat Hussain became the Governor of Pakistan’s Central Bank in December 1999 and remained its Governor for six years. — APP