Reviving the Economy

Since the beginning of the 1990s contractionary features inherent in public policies have resulted in a massive squeeze on investment in physical infrastructure in particular, and a sharp deterioration in the share of development in the government's total expenditure. All hopes have been pinned on the revival of industrial demand through possible improvement in agricultural growth in the current year following copious rainfall so far. However, because this beneficial impact, if it occurs, follows two years of falling incomes in the sector, it is not likely to be either significant or immediate. This note explores the possibilities of deploying the surfeit of liquidity in the financial system in a 'supply-leading' strategy for the development of railways and other physical infrastructures in order to kick start the economy.