will need to maintain macroeconomic stability by gradually reducing the twin deficits. besides prudent expenditure management, this will require broadening of the tax base to effectively finance growing expenditure obligations. sustainability of external current account deficit calls for raising exports earnings to finance the increasing imports requirement. imports will remain strong as the economy ’ s requirements for capital and intermediate goods for industry grow. balance of payment position will benefit from industrial diversification which is critical for export diversification as well as for encouraging import substitution ( particularly in food commodities ) where pakistan has competitive advantages. any pressures on aggregate demand because of slippages will need monetary tightening as central bank would remain committed to the objective of price stability. to realize these goals, pakistan needs to now direct investment flows, both domestic and foreign, to areas which can help stimulate industry and its diversification, and help remove gaps and bottlenecks in the infrastructure. pakistan offers opportunities to exploit gas and coal reserves suitable for power generation and hydroelectricity generation. the geographical proximity to energy rich regions, iran and central asia, position pakistan to emerge as a regional hub for energy. the investment requirements for the development of energy sector are in the range of $ 20 billion in medium term to around us $ 150 billion by 2030. national trade corridor plan ( ntcp ) equally offers opportunities to connect all major physical infrastructures such as ports, roads, railways, aviation etc. besides connecting pakistan with its neighbors it will enhance trade and improve market access, while saving fuel and transport costs. pakistan has set up an infrastructure project development facility to facilitate initiation of these projects through credit enhancement and financing institutions are geared up to adopt different approaches and modalities to leverage and intermediate financing flows for infrastructure. opportunities also exist to enhance production by enhancing productivity, efficiency and economic diversification. to diversify, pakistan has to make inroads into the medium and high - end technology products such as electronic goods, automobiles, engineering goods etc. and to look for newer markets. in agriculture, implementation of mega water resources projects will enhance crop yields. besides increasing value - addition, market - based pricing ( e. g. as done for rice and wheat ), improvements in transmission of pricing signals to farmers ( e. g. through introduction of a commodity futures market ), development of crop insurance ( particularly to encourage the raising of new cash crops such as oilseeds ) and improvement in transportation and storage infrastructure will contribute to enhancing agricultural productivity. development of agro - based industry and processing

china as well as to the oil rich middle east and untouched central asia with vast natural resources, potentially carries opportunities which to date have not been properly exploited. promising for private sector would be the large infrastructure projects which would offer high return in long term but would help enhance access and efficiency in movement of goods within and outside pakistan. if done right, pakistan can easily integrate itself into the export value added chain of the region as there is adequate room for further growth ; investment in these sectors is thus highly feasible. for example, pakistan still stands relatively low in terms of motorization when compared globally and even within the region. automakers need to take this into account as the demand clearly exceeds supply. likewise the supply of electronic goods is still short of the potential demand and any increases will be absorbed by the population which is growing and expected to double over the next 25 years. in future, the demand for energy, cement, fertilizer, and leather products is expected to increase. the energy demand over the next five years is expected to grow at a rate of 7. 4 percent per annum and over the next 25 years it is expected to be 7 times the present demand. 2 thus the sectors, particularly those discussed above, remain attractive for foreign investors due to strong consumer spending patterns and rising industrial activity depicted by past trends and strong future demand. likewise, banking sector has to position itself to extend its outreach, which will play a key role in sustainability and in diversifying risks. for long term sustainability and to maximize the development impact, small and medium enterprises should be encouraged and further developed as they will be able to fast restructure themselves as and when warranted and will play a more critical role in employment generation. besides bringing in much needed capital, increased foreign presence is expected to help pakistan integrate better globally and regionally, enhance skills and techniques and transfer and increase usage of technology. it is our belief – so far reinforced by experience – that private sector participation and foreign investment are going to be the cornerstone of our future economic strategy. according to planning commission, presently the energy demand measured in mtoe was around 50 mtoe in 2004 which will increase to 79 mtoe by 2010 and 361 mtoe by 2030.