Federal Minister for Poverty Alleviation and Social Safety Shazia Marri has said that the current devastating floods necessitate the need to invest more on social protection projects and develop resilience to address the inequalities in the country.
She was speaking at a policy dialogue on “Economic and Social Survey of Asia and the Pacific 2022 – Economic Policies for an Inclusive Recovery and Development”.
The minister said that at a time when floods have rendered heavy financial and life losses, Pakistan needs a major shift in its macroeconomic policies to streamline the recovery phase.
Parliamentary Secretary on Law and Justice Mehnaz Akbar Aziz emphasised the need to strengthen people-to-people contacts and the local government system in these testing times.
She stressed the need to engage youths, women, children and minorities in debates on economic policies to ensure their inclusivity and to align them with the real-time needs of people.
“It’s time to scale up investment in the health and education sector to address social and economic inequalities,” she said, adding that “we must focus on job creation and make fiscal space for entrepreneurship for this purpose”.
She said that people must be relieved of the financial burden of energy bills and solar energy must be promoted on a priority basis in rural areas.
Highlighting the important aspects of the macroeconomic model developed for Pakistan, SDPI Executive Director Dr Abid Qaiyum Suleri said that the model has become very relevant in the backdrop of current flood disasters in various parts of the country and diverts our focus on aspects of resilience and social protection.
He pointed out that K-shaped recovery has been recorded and various sectors are struggling to bounce back from the negative impact of COVID-19, which requires macro-economic stabilization, fiscal interventions and redistribution policies to bridge the financing gap between sectors.
Federal Secretary for Ministry of Planning, Development and Special Initiatives Syed Zafar Ali Shah said that the growth pattern has been disturbed due to the pandemic, however, Pakistan has recovered from negative to 5.9% growth. Now, it is time to redistribute efforts for inclusive, fair, and resilient recovery, he said.
He said the approval of fiscal policies by the International Monetary Fund has a positive sign on macroeconomic stability. He further said that the central bank has a key role in supporting inclusive growth, but it is a challenge to choose between growth or managing inflation triggered by domestic and international stimuli.
He said that from the Rs9.5 trillion federal budget, resources must be redirected to control inflation and make pro-poor policies. He emphasised improving the governance structure for smart spending and focusing on social protection.
He further said the government has directly dispensed Rs20 billion to the flood victims of Balochistan through direct transfers via BISP and will be carried out for other areas as well.
Ali Kemal, Chief of the SDGs unit, said that to achieve the 2030 agenda, $4 to $7 trillion are required annually but there is a huge gap in the investment.
In the case of Pakistan, 10% of GDP must be invested while the current investment is only 1% of GDP, he said. Currently, Pakistan is 90% behind its financial resources necessary to achieve the SDGs agenda, he said.
Dr Hamza Ali Malik, Director, Macroeconomic Policy and Financing for Development Division, UNESCAP, said that UNESCAP has decided to change the strategy and increase engagement with experts, hold policy dialogues in countries and engage with policymakers to transform the ideas unto reality. In 2021, the macro-economic model was developed for Pakistan. There was a widening gap and exacerbating inequalities and called for revisiting major macro-economic policies to address these issues, he said.
Jian Zheng, Economic Affairs Officer, Macroeconomic Policy and Financing for Development Division, UNESCAP, said that the pandemic has pushed 85 million people to extreme poverty with highly detrimental impacts on informal workers, employment, subdued capital investment by further shrinking fiscal space and exaggerating learning deficits.
He stressed the need to use a multipronged strategy to support inclusive recovery based on structural transformation, enhancing the role of the central bank and fiscal policy interventions for the social security net.
Dr Sajid Amin, SDPI Deputy Executive Director, said that the macroeconomic model developed by SDPI and the planning commission is tailored to address the contemporary socio-economic challenges of Pakistan.
The model suggests that 9.6% of the GDP must be spent on social protection while the current spending status is much lower.
Dr Shabnam Sarfraz, Member of Social Sector and Devolution, Planning Commission, said that the planning commission repurposed finances for COVID-19 and built up a case for investments which was successful in securing Rs72 billion for one project.
Published in The Express Tribune, August 27th, 2022.