Lahore School of Economics

Lahore School of Economics’ Fourth Annual Conference on Management of Pakistan Economy (Ensuring Stable and Inclusive Growth) concluded here on April 25, 2008. A group of distinguished policymakers, academics, and international experts related to economic management presented their papers to the informed gathering.

The Second day of the conference on the Management of the Pakistan Economy, being organised by Lahore School of Economics began with a session on 'Rethinking Development Strategy.' The session was chaired by Dr. Shahid Javed Burki who emphasised on the state's role in facilitating development in countries such as Pakistan through technical advice and financial support. He said that policies based on the 'Washington Consensus' may not necessarily be ideal for the developing countries and thereby should be taken 'with a pinch of salt.'


Dr. Naved Hamid, former Senior Economist, Asian Development Bank made the first presentation in the session. His arguments were centred on how the world economic structure has changed. Unlike the development trajectory followed by the newly industrialised countries, growth prospects can no longer remain dependent on manufacturing and export orientation. The change can essentially be attributed to an inexhaustive labour supply in China due to which it is attracting high FDI flows. The new path is that of outsourcing tradable services encapsulating both high and low skill jobs. The acceleration of globalization has been made possible through the Information and Communication Technology (ICT) Sector which has resulted in the death of distance. Further propounding on the benefits of services led growth strategy, he said that the balance of payments constraint would be relaxed in addition to greater employment generation. A key role must also be played by regional cooperation through which market access can be widened and higher investment levels can be achieved. However, to exploit this opportunity Pakistan must invest in expanding its knowledge economy. The second sector deserving attention is the agricultural sector as Pakistan can benefit from the rise in the international price of food commodities if it chooses to remove wide-spread distortions in the system.

The second presentation by Dr. Rajiv Kumar, Director and Chief Executive, Indian Council for Research on International economic Relations highlighted the problems being faced by the Indian economy with regards to the services sector development. He referred to it as unsustainable and conducive to the development of a dualistic society. This assertion was based on the fact that more than 50% of the Indian population is employed in the agriculture sector which is only about 18% of the GDP. He further briefed on the performance of the Indian macro-economy and stressed on the need to revise prices upwards given the rising global prices scenario. His participation was much appreciated due to the insight he provided on the various constraints that the Indian policy makers are faced with and their similarities with problems in Pakistan.

The fifth session of the conference was a panel discussion on Inflation, Macroeconomic Stability and Growth. This session was aimed at delineating different perspectives on why inflation, global and domestic is rising, and what is the new route to be taken to minimize the impact of the crisis. The panellists were Dr. Azam Chaudhry, Dean of Economics Department, LSE, Mr. Riaz Riazuddin, Economic Advisor, SBP and Mr. Sakib Sherani, Chief Economist, ABN Amro Bank. The discussion in this session took into account both the monetarist and structuralist point of view with regards to the causative factors of inflation. The main conclusions pointed towards the need to remove distortions in the agriculture and oil sector in Pakistan so that the impact of rising food and oil prices can be dampened. It was also highlighted that the impact of food inflation is higher on poverty in rural areas as compared to rising fuel costs. However, in the longer-term rising food prices will benefit the rural poor engaged in farming of food crops as the price of their produce will rise. Another interesting point raised in the session highlighted how rigorous monetary tightening can control food inflation. The adequacy of monetary tightening was also questioned as peaks in reserve money have not been lowered in the contractionary phase post FY05.



The effort made by the Lahore School in organizing such an event must be lauded given the urgent need to resolve economic issues impacting political stability in the country. It can be further said that such an event has not been organized before considering the quality of the papers presented by prominent policy makers and academicians.

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The first day of the Fourth Annual Conference on the Management of the Pakistan Economy being organized by the Lahore School of Economics started with interesting keynote addresses delivered by Dr. Shahid Amjad Chaudhry, the Rector Lahore School and Dr. Shahid Javed Burki former Vice President of the World Bank.

Dr. Shahid Amjad emphasized on the need to alleviate poverty through expenditure on Education, Health and Housing. He was of the view that the role of private sector in the provision of education should be encouraged through direct income supplements such as a transferable voucher schemes. He blamed the inadequacy of health services provision as the biggest cause of families falling prey to poverty, to be reformed through, compulsory coverage of hospitalization expenditures. On the housing front,he further proposed that public housing schemes should be reintroduced and that payments made towards housing rent should be directed towards housing loans. To finance these expenditures, Dr. Amjad suggested that the tax base be widened to include the energy sector, real estate and the stock market. Addressing macro-economic imbalances, he said that the Current Account Deficit should be minimized through exchange rate adjustments and revisiting the idea of increasing tariff rates.

In the following keynote speech, Dr. Shahid Javed Burki highlighted the importance of learning from history to understand the lack of adequate development of institutions in Pakistan. He also stressed on the need to specifically develop an industrial and trade policy instead of generally focusing on the role of the public and private sectors

The first session based on the ‘Unfinished Reform Agenda’ commenced with the presentation of a paper) titled ‘Public Policy Fundamentals Focusing on the Private Sector for Sustainable and Inclusive Growth.’ by Dr. Ijaz Nabi (Sector Manager, Economic Policy South Asia Region World Bank). The paper argued that to reduce regional and interpersonal disparities, government programs should be cost-effective, transparent, monitored and effectively evaluated to improve tax compliance on the part of the citizens. The second presentation by Dr. Hafeez Sheikh, Former Minister of Privatization and Finance Minister of Sindh, GoP discussed tax reform, revenue mobilization and privatization in Pakistan in the current and historical context .

In the second session on ‘Inclusive Growth and Poverty’, Dr. Rahid Amjad, Vice Chancellor, Pakistan Institute of Development Economics , presented a paper on whether labor market structures help explain poverty in rural Punjab. The paper brought forth four factors to explain inequalities in rural Punjab such as integration with urban settings, flow of remittances due to overseas migration etc. The paper helped in understanding how differentials in poverty occur due to employment structure across agro-climatic zones in the Punjab.

The Third session ; essentially a panel discussion on regional Inequalities delineated several ways in which regional inequalities can be addressed while suggesting solutions as well. The panelists present in this discussion were Shahid Kardar, Dr. Ali Cheema and Dr. Sajjad Akhtar prominently recognized in their contribution to policy making and academia.


Large number of policy makers, academicians and students eager to indulge in policy debates regarding the role that the new government should be playing attended the Confrence. The highlight of the second day would be a session on ‘Rethinking Development Strategy’ and discussions on rising inflation and its causes.

The Pakistan Economy is facing critical problems which are threatening its political and economic stability. At the forefront are issues such as rising inflation, poverty and macroeconomic imbalances which will have an adverse impact on the growth momentum as well. The recent elections have paved the way for the government to reorganize strategy in relation to various pending reforms needed to remove distortions and inefficiencies that prevail in the economy.

The Lahore School of Economics is hosting the Fourth Annual Conference on the Management of the Pakistan Economy between the 24th and 25th of April, 2008. The theme of the conference is ‘Ensuring Stable and Inclusive Growth’ keeping in view the immediate and medium term decisions that have to be made by the policy makers in the (new) post election provincial and federal governments.

The Keynote Address will be delivered by Dr. Shahid Javed Burki, former Minister of Finance, GoP and Vice President of the World Bank. To discuss pressing concerns such as poverty and inequality, and, economic problems such as inflation, the conference aims to gather leading economists and former policy makers such as Dr. Hafeez Sheikh former Minister of Privatization and Minister of Finance, Sindh, Riaz Riazuddin, Economic Advisor, State Bank of Pakistan, Shahid Kardar former Minister of Finance, Punjab, Dr. Ijaz Nabi, Sector Manager, Economic Policy South Asia Region, World Bank and Dr Hafiz Pasha ,former Regional Director for Asia and Pacific and currently, Dean of the School of Social Science and Vice Chairman of the Institute of Public Policy, BNU, and, Dr. Rashid Amjad former Director for Policy Planning, Employment, ILO and currently Vice Chancellor, Pakistan Institute of Development Economics.

Further, leading academicians such as Dr. Ali Cheema, Acting Head of Economics, LUMS and economists from the private sector such as Sakib Sherani, Chief Economist, ABN Amro Bank and Dr. Sohail Malik, Chairman, Innovative Development Strategies (PVT). Ltd. will also be participating in the conference. In addition, Dr. Rajiv Kumar, Director and Chief Executive, Indian Council for Research on International Economic Relations will present his views as well.

The Lahore School of Economics (est. 1993) has been organizing the Annual Conference on economic and policy issues since 2005. In line with its objective to impart knowledge and train young Pakistanis as economists, analysts, managers and business executives, the essential aim of the annual conference is to promote a dialogue/discussion on key economic management and strategic issues facing the country.

The sessions to be held on the first day will focus on the (i)‘Unfinished Reform Agenda’ in the areas of trade, banking, finance etc.,(ii) ‘Inclusive Growth and Poverty’ addressing the impact of growth on income inequalities and poverty reduction. This will be followed by a panel discussion on ‘Regional Inequalities’ and their impact on political instability and economic development. The highlight of the second day will be a panel discussion on ‘Inflation, Macroeconomic Stability and Growth’ seeking to address the impact of international commodity price hike on inflation and supply shortages in Pakistan in addition to inefficiencies that prevail in the domestic price determination of food and oil.

The conference is open to all individuals with an interest in the current policy framework and its implementation in the Pakistan Economy. Prospective participants can register themselves at the venue i.e. the main campus of LSE at Burki on both days. The organization hopes to make this event an interactive learning experience especially with regard to the relevance of theory and policy in the case of Pakistan.

he Fourth Annual Conference on Management of the Pakistan Economy is being held in Lahore School of Economics (Center for Research in Economics and Business) on 24-25 April, 2008. The focus of the fourth conference is on Ensuring Stable And Inclusive Growth. The underlying objective of the conference is to promote a dialogue/discussion on key economic management and strategic issues facing the country today, particularly with regards to decisions, both immediate and medium term, that will have to be made by policy makers in the new (post election) federal and provincial governments.

The topics and broad areas that would be covered in the different sessions are as follows:

Session 1 – The Unfinished Reform Agenda: During the last decade and a half, significant reforms have been carried out in the areas of trade, banking and finance, taxation and fiscal policy, State Bank autonomy and monetary policy, etc. However, the process is far from complete. Papers on the issue of second generation reforms, as well as an assessment of the past reforms would be included in this session.

Session 2 – Inclusive Growth and Poverty: Pakistan has experienced rapid economic growth over the last five years, but the benefits of this growth have accrued primarily to the rich. For political stability and sustainability of the growth process, inclusive growth and poverty reduction are essential. Papers in this session will address issues of income inequalities, poverty reduction and inclusive growth.

Session 3 – Panel Discussion: Regional Inequalities: There are imbalances in the level of economic development and in the recent rate of growth, both between different provinces and within each province. Regional inequalities not only can be a source of political instability, but also can be a drag on the economic development of the country. The panel discussion will focus on the issues of regional inequality, particularly as to how these problems may be addressed.

Session 4 - Rethinking Development Strategy: Because of globalization, emergence of China as a manufacturing super power and the recent developments in India, it is necessary re-evaluate our development strategy. Traditionally, the manufacturing sector has been the focus of any development strategy. However, in South Asia, the services sector not only accounts for over 50% of the GDP but in recent years has been the leading sector in terms of economic growth. Papers in this session will focus on the implications of these developments for the future development strategy.

Session 5 – Panel Discussion: Inflation, Macroeconomic Stability, and Growth: In Pakistan, large subsidies (both energy and food related) have been used to protect consumers from the increase in international prices. Not only are there doubts about the sustainability of these subsidies, Pakistan as a major agriculture producer may be in danger of missing out on a golden opportunity if the increase in international commodity prices represents a secular trend. However, with inflation close to double digit levels, the passing through of higher international prices to consumers has serious consequences for the urban poor. The panel discussion will focus on these issues, particularly from the perspective of what is to be done rather than on the mistakes of the past.

Naila Hafeez and Tayyaba Kamal

Lahore School Alumni Dinner 2008 was held on Saturday April 12, 2008. The evening started with a welcome address by Professor Shoaib Hashmi and then Shumyla Chaudhry, the President of the Alumni Club, addressed the audience.

Naila Hafeez

Naila Hafeez Haseeb Aslam Country Business Manager Water Nestle gave a talk to the students of MBA {Marketing Strategy Course} on March 25, 2008. His interactive lecture was attended by a large number of students. He told the students that dairy business was one of the biggest in Pakistan as there was a huge opportunity in dairy. While talking about consistency to build any brand, he gave examples of other competitors as well. He also talked about everyday used liquid, juices, sugar free juices , yogurt , coffee and noodles.

Naila Hafeez Saqib Shirazi CEO, Atlas Honda Limited addressed the MBA and MSC Economics students on March 24, 2008 in Lahore School of Economics. His talk was based on his own success story which he shared with the students at Lahore School. Lecture was followed by questions and answers session.

Saman Khan

A team of 7 members from ABN AMRO Bank including Ali Kazmi, the Regional Corporate Head-Central, Syed Imam Bukhari, Coutry Head Branch Banking, Hafza Abbasi, Country HR Advisor-Consumer Banking, Waqas Khan, Country HR Advisor-Corporate and Services and HR Business Partners visited Lahore School of Economics on April 1, 2008 and gave a presentation on their Management Associate Programme and conducted an interactive session with the graduating MBA, BSc Hons and BBA Hons students of the Lahore School. The presentation was followed by an on campus test for their Management Associate Programme

Sohaib Shahid The South Asian Economics Students’ Meet (SAESM) 2008 was co-hosted by Ramjas College and Miranda House, two prestigious colleges of The Delhi University. Undergraduate students from over twenty different universities and colleges from all over South Asia attended this three day long meeting. The event this year unfolded in four categories; Paper presentations, IFMR’s Budding economist competition, The rappporteurship competition, and Google’s inter-country South Asian Quiz competition. The paper presentation had four themes under which two students from each country had to present a paper and deliberate through their writings. The budding economist competition comprised of four stages of rigorous economic testing. The rapporteurship competition tested the student’s ability to comprehend the session’s proceedings, and the inter-country economics quiz tested the students’ understanding of the economic challenges facing South Asia. The Lahore school of Economics participated in SAESM for the first time this year, by sending three undergraduate students in the thirteen member strong Pakistani contingent. The Lahore School representing Pakistan stamped its authority in the competition, a fact that was acknowledged by Country organizer (India) Deb Kusum Das, Country organizer (Pakistan) Dr. Turab Hussain, and various faculty members from different South Asian universities. The three students from the Lahore School were representing Pakistan in the quiz competition, the budding economist competition, and the paper presentation. Sohaib Shahid, (Lahore School) and Duaa Khalid represented Pakistan in the inter-country South Asian quiz competition, which was the highlight of the meeting. After a marathon of eight rounds, spread across two days the nerve-wracking action packed quiz competition ended after Pakistan edged past India-B in a close fought battle, which went into a tiebreak. Sohaib and Duaa helped Pakistan clinch the first position, and bagged a handsome cash award. Muneeb Ur Rehman, (Lahore School) and Omar Qureshi competed in the budding economist competition. The competition amongst the young budding economists of South Asia was highly intense, but Muneeb and Omar were one of the five candidates who went into the second round from amongst a large pool of candidates in the competition. Keeping their performance in mind, both were offered an internship by India’s prestigious ICICI organization. Abdul Rafeh Iqbal, (Lahore School) presented a paper under the theme ‘Investing in the social sectors’, titled Reducing poverty through investing in the education sector and health sector. The paper highlighted the plight of the poor in South Asia, and brought forward different methodologies for poverty reduction, and various policy implications related to poverty with a social sector perspective. The judges and chairs for the conference included the World Bank South Asia Region President, officials from the World Bank, Chief Justice of India, and officials from the International Labor Organization (ILO) and Google Inc.