elected representatives of an area should assume an active role as watchdog to make sure that the poor segments of the population are treated well at the government facilities. instead of focusing their attention on the postings and transfers of individual officials they will win popular support if they redress the grievances of their electorate in accessing basic services provided by the government. this vigilance will keep the officials on the right track while endear the elected representatives to their electorate. monitoring and evaluation of various programmes and projects will have to be carried out separately in a systematic way.

the future complexion of the financial sector and its institutions and entail far reaching implications in terms of stimulating increased competition, greater consolidation, increased diversification and enhanced dynamism in the financial players and markets. the central bank, along with major players in the market, will continue to develop and refine the mutual vision and plan for the financial system of pakistan. all key players will have to correspondingly position themselves, change their attitudes, and be responsive to collectively transform the financial system of pakistan into a dynamic and efficient arm of the economy. this can be attained if the financial system meets the divergent needs of all segments of the economy by providing a wide array of financial services based on the use of globally competitive technology, highly skilled human resources and harnessing global best practices. equally critical for regulators, are the aspects of the stability and robustness of the financial system and as such there will have to be further refinements in the domestic regulatory and supervisory framework to align it more closely with international standards, while taking due notice of the attendant and emerging global and domestic challenge and risks. i will now elaborate on the forces and factors which might be directly or indirectly related to the future performance and standing of the financial system of pakistan. macroeconomic performance and priorities financial system of any country has an intrinsic relationship and needs to be shaped in accordance with the broader economic needs, structure and policies. considering this interdependence, it is imperative to assess the behavior and trends of the key macroeconomic indicators while drawing the emerging contours of the financial system. in this respect, the major indicators of the economy during the last few years have shown robust performance. gdp growth shot up to over 8 percent in fy05 and the current year also promises higher than 6 percent growth. undoubtedly, consistent and stable economic policies provided the businesses with confidence. however, easy availability of funds on the back of historically low level of interest rates proved to be the real catalyst for the subsequent sharp growth in credit to the manufacturing sector and eventually proved to be the real determinant of high gdp growth. strong credit demand of the manufacturing sector translated into a sharp increase in the interest income of the banking system, giving rise to unprecedented profits and healthier balance sheets during the last two years. redeployment of these profits to augment financial services will help meet the growing economic requirements. the near term economic prospects are promising. the continued strong pace of economic activities, and plans to launch widespread infrastructure reforms offer