Govt urged to break economic logjam

Economist calls for better governance, high revenues and low expenditures

LAHORE: Good governance and macroeconomic management are drivers of economic growth but they have gone dormant for quite some time, said Lahore Chamber of Commerce and Industry (LCCI) President Shahzad Ali Malik.

At the Economic Dialogue 2011 arranged by the LCCI on Tuesday, Malik said, “the government needs to work on these drivers to break the economic logjam.”

Senior economist Dr Akmal Hussain said the country is facing the gravest economic crisis since 1971 due to the current recession, poverty and high level of inflation. He added that the government has no fiscal space and warned of three-digit inflation if an immediate improvement in governance is not brought about and it must be accompanied by a cut in expenditure and substantial increase in revenue.

Former World Bank executive Abid Hassan said institutional decay has now started to take its toll and the government should take appropriate measures on an emergency basis to stop this decay. Hassan explained that the government should concentrate on tax collection and controlling of unnecessary expenditures, otherwise it was unlikely for the economy to get back on track.

Pakistan Institute of Development Economics Vice Chancellor Dr Rashid Amjad said the scenario could be changed by overcoming the acute energy shortage in the country.

Published in The Express Tribune, February 2^nd, 2011.