Conference: Economists asked to do more

Deputy Chairman Planning Commission bemoans lack of research on key issues.

ISLAMABAD: In what appeared to be a soul-searching speech, Deputy Chairman Planning Commission Dr Nadeemul Haque on Tuesday said that economists, including him, have not done enough to provide solutions to economic challenges faced by the country despite having a platform to express themselves.

Inaugurating the 26th annual general meeting and Conference of Pakistan Society of Development Economists (PSDE) - a society that prides itself on being the only professional association of economists and other social scientists in the country, Haque highlighted the weaknesses of the economy and the economists.

“Research does not respond to the key issues of the time such as governance, democracy, institution-building, entrepreneurship and migration to cities, as research is not question-driven,” said Haque.

He further went on to say that research is slavish to methodology and data. “Why, for example, have the Pakistani economists not written papers on qabza, property rights, eminent domain, regulation, markets and governance? Why do we continue to run regressions on old issues and old question, and merely copying methodologies?”

Haque said he approached a few of the eminent economists to get more information on their role in policy-making. “I am sad to report that the general feeling was that the community of economists was not exerting the sort of pressure that it is in other countries.”

Despite efforts, the fiscal deficit remains beyond levels that would be considered sustainable. Not only is debt growing rapidly, the State Bank’s financing of the deficit is contributing to inflation.

Haque said despite some privatisation and liberalisation, the public sector and government continue to penetrate market through loss-making public sector enterprises and excessive regulation at the cost of productivity, growth and employment. Public sector enterprises (PSE) losses are now dominating the budget.

“Our growth remains volatile averaging about five per cent per annum over the last 20 years. For Pakistan to become a middle income country, we need a sustained growth of about eight per cent. Internationally available indicators such as competitiveness, investment climate and enterprise surveys all point to weaknesses in governance as major constraints to growth.

“It is worth asking while all this has been happening, how PSDE and its members have contributed to policy-making during this period. As a former president of PSDE, I invite PSDE members to review our responsibilities as social scientists of Pakistan,” said Haque.

This reform agenda requires a huge amount of research work, involving macro analysis, detailed measurement, learning from international research and experience, case studies and analysis of the current legal and regulatory frameworks.

“For growth, we have to move beyond sector policies, PSDPs, ADPs, acronyms and metaphors. We need to think beyond ‘brick and mortar.’ A whole new intellectual endeavour has to take place,” he concluded.

Published in The Express Tribune, December 29^th, 2010.