Call to turn economic crisis into opportunity

Speakers say IMF should be last option to extricate country from economic morass

ISLAMABAD:

Speakers have said that the current challenges offer a chance to seriously re-examine Pakistan’s economic situation.

They were speaking at a “Challenges for Pakistan’s Economy and the Way Forward,” seminar organised by the Centre for Aerospace and Security Studies (CASS) in Islamabad.

The speakers included the Federal Board of Revenue’s former chairman Shabbar Zaidi; Pakistan Institute of Development Economics Vice-Chancellor Dr Nadeem ul Haque, former Minister of State and Chairman Board of Investment Haroon Sharif, CASS Economic Affairs and National Development Director Dr Usman W Chohan.

Air Chief Marshal (retd) Mujahid Anwar Khan was the guest of honour.

CASS Research Assistant Zahra Niazi, who moderated the proceedings, said that Pakistan was beset with unprecedented economic crisis, with reserves fast-depleting, exports and remittances declining, inflation surging , unemployment rising, rupee depreciating and business production decreasing threatening the country’s financial stability and the well-being of its people.

Discussing the root causes of the economic crisis in Pakistan, Shabbar Zaidi pointed out that the most significant issue was the high import bill and weak export base. He argued that labour was expensive and inefficient, and the absence of women in the labour force was also a significant challenge. He said that the current rate of 25% inflation could become uncontrollable if emergency measures were not taken to curtail import bills, reduce energy bills by shutting all businesses and shops by 6:30 pm and cut administrative costs.

Dr Nadeem ul Haque said that the International Monetary Fund was supposed to be a ‘ladder of the last resort’, for Pakistan, but it had become its ‘go-to first option,’ with the country availing 23 IMF programmes in the last 75 years.

While sharing IMF’s latest global economic outlook, Haroon Sharif said that Pakistan was not the only country reeling the pain of rising inflation and economic meltdown but the question was how other countries were handling their financial crises.

Sharif said that countries such as Dubai and Qatar have international financial centres where local laws were not implemented rather, they had a separate set of laws. “Countries create corporate spaces with no government interferenc, which gives confidence to the private sector Pakistan needs to minimise government’s involvement and build trust with businesses for reviving the economy and moving on a path of progressive growth.

Highlighting the crises engulfing emerging economies, Dr Usman W Chohan believed that even countries that did well during the Covid-19 pandemic were struggling in the post-Covid-era and that there were generalizable global worries to which Pakistan was no exception.

CASS President Air Marshal (retd) Farhat Hussain Khan said that Pakistan not only lost its industrial base in the 70s following the nationalisation policy which led to de-industrialisation in the country, harming human resource development and eventually leading to high dependence on imports.

 

Published in The Express Tribune, February 4^th, 2023.