Pakistan has entered into a phase of almost stagnant growth and high inflation, leading to job losses, and the situation demands an easy monetary policy and improvement in economic management to steer the country out of economic mess, suggests a think tank, while pointing out that almost three-fourth population faces food insecurity.
The Pakistan Institute of Development Economics (PIDE), a public-funded organisation, on Wednesday unveiled what it called a three-pronged strategy to improve the economic situation.
PIDE urged the government to lower interest rate, take provincial governments on board for improving management and ensure fiscal prudence.
During the last three years, average growth rate remained at 2.6 per cent, while inflation was in double digits in the last 45 months, the highest-ever period since 1973-74, sparking fears of hyper-inflation.
PIDE Vice Chancellor Dr Rashid Amjad said, “The three-point strategy tabled to steer the economy out of stagflation focuses on better macroeconomic management, maintaining fiscal prudence while reviving the role of government in development and prudent monetary management for revival of the private sector.”
Poverty expert Akmal Hussain said, “Pakistan is facing deep recession, resulting in higher poverty and unemployment. Our 74 per cent food-insecure population coupled with deep recession is causing severe stress for the nation.”
Finance ministry’s former principal economic adviser Sakib Sherani said that Karachi’s 94 per cent commercial land was blocked by Pakistan Army, Pakistan Navy, Karachi Port Trust (KPT) and Pakistan Railways, leaving no space for undertaking economic activities by the private sector.
Finance ministry’s former economic adviser Dr Ashfaque Hassan Khan said that the investment-to-GDP ratio had dropped from over 22 per cent to 13.4 per cent in the last few years, which was the lowest over the last 40 years. He said it indicated that there would be no higher growth and job opportunities over the next two to three years.
Published in The Express Tribune, May 12th, 2011.