Lahore School of Economics

A distinguished seat of learning, teaching and research

Against heavy odds

Dr Rashid Amjad    

With the country reaching its 75th anniversary, there has been much doom and gloom as the economy passes through another downturn triggered by its recurring trade imbalance and debt crises. Yet, it is important to remind ourselves that notwithstanding its near-insurmountable challenges, the economy has achieved some remarkable successes — even if it has not realised its full potential.

Pakistan has increased its per capita income from around $100 in 1950 to (a vastly underestimated) $1,750 in 2022. Starting with a non-existent modern manufacturing sector, it has built one up thanks to an earlier generation of dynamic entrepreneurs and traders, many of whom had migrated from India. It today contributes 15 per cent of GDP. Literacy rates have increased from overall 15pc to 70pc for males and 50pc for females, with significant growth in higher education in recent years.   

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posted by S A J Shirazi @ 8/17/2022 02:22:00 PM,

Independence Day Celebrations - 2022

As per the Lahore School tradition, Pakistan’s 75th Independence Day was celebrated on 14 August 2022 in the Lahore School of Economics Main Campus with national fervor and zeal. Dr Shahid Amjad Chaudhry, Rector Lahore School of Economics was the chief guest.


Senior Faculty, Administrative Staff and Support Staff attend the celebrations. Children and families were also present in the festivities of 75th Anniversary (Diamond Jubilee) of Pakistan’s Independence Day at the Lahore School.


Dr Shahid Amjad Chaudhry raised the national flag. Later, addressing the enthralled audience, the Rector gave an overview of the rich national history, what we have gained in the last 75 years and role of the Lahore School in the development of Pakistan. Other highlights of the day were thematic Cake Cutting, distribution of sweets and collective lunch in the main cafeteria.
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posted by S A J Shirazi @ 8/15/2022 10:26:00 AM,

Happy Independence Day - 2022

 


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posted by S A J Shirazi @ 8/12/2022 11:24:00 AM,

Launch of the Pakistan Migration Report 2022

Centre on International Migration, Remittances and Diaspora
    
Dr Murtaza Syed, Acting Governor, State Bank of Pakistan spoke as the Chief Guest at the launch of the Pakistan Migration Report 2022, on June 30, 2022 at the Lahore School of Economics, Burki Campus. The report is second in the series published biennially by the Centre on Migration, Remittances and Diaspora (CIMRAD), Lahore School of Economics. Dr Rashid Amjad, Director Graduate Institute of Development Studies (GIDS) and CIMRAD opened the proceedings of the launch.


According to the report, it is unlikely that the surge in remittances witnessed during 2020 and 2021 will sustain. While the shift in inflows from informal to formal channels and the new initiatives during Covid-19 period were able to increase the average monthly inflows to around USD 2,500 million, the impact of these factors has been diminishing and inflows are slowing down. Deteriorating economic conditions and political environment discourages investment-oriented inflows, the report warns that this aspect demands consideration given the over reliance on these inflows.


Migrant outflows to the United Arab Emirates (UAE) declined drastically from 33.8 percent in 2019 to 9.6 percent in 2021, which is contrary to the historical trends. Correspondingly, remittance inflows from UAE and Saudi Arabia increased at a lower rate in 2020-2021 compared to 2019-2020. The report highlights the above observation as worrisome as the two countries are the largest recipients of migrants and senders of remittances to Pakistan.


The report also mentions that about half of Pakistani labor migrants continue to be low-skilled or unskilled, while the planned demand for such workers is shrinking in Saudi Arabia and the UAE. In terms of new migrant destinations, Pakistan has not made much progress. Malaysia that was considered as an emerging market showed a declining trend following the pandemic. Japan and China could be important destinations in the future but remained numerically insignificant as of 2021.


Dr. Syed lauded the efforts of the Lahore School of Economics in producing the exclusive report on migration and remittances. He emphasized on the critical role of remittances sent by overseas Pakistanis in sustaining external account of Pakistan. Over the past 10 years, on average 91 percent of the country’s merchandize trade deficit has been financed by remittances.


Acting governor of the State Bank highlighted that monthly remittances received by Pakistan have consistently exceeded 2 billion US dollars from June 2020 onwards despite Covid-19 and ensuing lockdowns. He also appreciated Government of Pakistan and State Bank of Pakistan’s policy measures and initiatives including the role of Roshan Digital Account, Pakistan Remittance Initiative and the Sohni Dharti Remittance Initiative in increasing remittances by reducing the transaction costs, providing better investment opportunities and incentivizing the overseas Pakistanis.


While acknowledging the positive developments to enhance remittances, Dr Syed also identified three policy gaps: i) mismatch in the skillset of workers going abroad from Pakistan and the type of job openings abroad, ii) need for improvement in financial literacy of population to enhance individuals’ trust in the formal financial system and iii) increasing coordination and collaboration between the public and private sectors to identify and resolve bottlenecks.


Dr Jonathan S. Addleton, Rector, Forman Christian College and an internationally recognised scholar on migration also spoke at the event. He pointed out that over the years Pakistan’s migration dynamics have been dominated by recurring themes of low skill level of labour migrants and outflows concentrated in districts of Punjab and KPK. Also in terms of destination countries, Gulf has remained amongst the top host countries, consistently.


Dr Amjad emphasized on the need to focus on policies to address challenges of informal remittance inflows and illegal migration. According to previous estimates around 57 percent of remittance inflows are through the informal channels. He also highlighted data constraints and stressed on the need for access to more detailed data for carrying out more rigorous analysis.


Other speakers at the launch ceremony included Dr. Nasra Shah, Coordinator CIMRAD and Professor at GIDS, and Almazia Shahzad, Research & Teaching Fellow at GIDS. Dr. Shah shared the main messages of the report with a focus on migration outflows and governance of migration related SDGs, while Ms Shahzad presented an analysis on remittance inflows and relationship with the macroeconomic situation of the country.


Dr Shahid Amjad Chaudhry, Rector, Lahore School of Economics concluded the proceedings of the launch. In his closing remarks, while discussing the reliance of Pakistan’s economy on Pakistanis workers remittances, he drew attention towards the need to focus on better macroeconomic management by relying on internal policy measures and monetary and fiscal tools and not mainly on exchange rate depreciation.


Also in Nation, Pakistan Observer

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posted by S A J Shirazi @ 7/01/2022 09:02:00 AM,

Bad macroeconomics

Dr Rashid Amjad

Our current economic crisis is as much a result of external shocks as our lack of understanding of macroeconomic dynamics that have caused frequent changes in Pakistan’s growth path.

Indeed, this lack of understanding has led the economy to move in stop-go economic cycles at regular intervals; in fact, the growth cycles have become more frequent, resulting in the significant lowering of average growth since 1988. Why has this happened?

As to the factors behind the growth slowdown, there is broad agreement — low levels of saving and investment and lack of political will to carry out basic structural reforms to increase revenues, break the stranglehold of monopolies, and foster competition and productivity growth, including the removal of trade barriers. In the absence of reforms, the challenge then is to manage the economy within the resulting structural constraints which impose limits on sustainable growth.

To take an example: in 2008, the economy faced a severe foreign exchange crisis, with strong concerns of default. In came the IMF to suggest a sharp reduction in the fiscal deficit to stabilise the economy. It projected that the economy would slow down after stabilisation measures to 3.5 per cent. In fact, it crashed to 0.5pc with unemployment rising sharply and food inflation standing at 21pc (as subsidies were slashed). This was the worst ‘hard landing’ we had ever witnessed.

The macroeconomic framework under which the budget of the new coalition government has been prepared appears to be suffering from the same malaise. It wanted to match the PTI’s impressive growth performance of near 6pc over the last two years but saner counsel prevailed and it opted to target a growth rate in 2022-23 of 5pc. The government will be lucky if it achieves 3.5pc to 4pc on the current policy package. In all probability, this rate will fall even further after the stabilisation squeeze it has agreed to with the IMF. Inflation, too, will be much higher than the targeted 11.5 pc and may rise to near 20pc in the next six months. Interest rates will rise further. Ambitious revenue targets will dampen growth and cause inflation to escalate.

We are heading for another hard landing. It will take all the finesse the finance minister can muster to get the IMF to soften its stance — which, unfortunately, it rarely does. What it will agree to are additional resources to cushion the impending stagflation in the form of well-targeted direct income support measures through BISP. The government should use these safety nets effectively.

To what extent is the current macroeconomic predicament the result of economic policies followed by the previous PTI government? To be fair to the PTI when it was in government, it handled the Covid-19 pandemic extremely well and cushioned its economic impact — a fact that was internationally recognised. Its economic policies to reignite growth helped revive it to over 5.5pc in 2020-21. Prudently, it targeted a growth rate of just over 4.5pc for 2021-22 to prevent the economy from overheating.

What it did not foresee — as most other countries — was the post-Covid super-consumer boom that was fast unravelling. Early signs of the economy overheating were not picked up by the IMF and World Bank which projected a growth rate of 4pc for 2021/22 — still below the sustainable growth projected by some studies of 4.5 pc.

In fact, the economy grew by near 6pc and the binding economic constraint to sustainable growth — the foreign exchange constraint — had entered with full force. Here, the State Bank of Pakistan must shou­lder much of the bla­me because it allo­w­­ed the forei­­gn ex­­change rese­r­ves position to fall to precarious levels. Although the central bank had started raising interest rates, its cheap credit policy, which pumped in imports at an alarming rate, had been maintained for too long. The sudden change in government meant a loss of international confidence, even among Pakistan’s close friends, who refused to roll over their deposits. We now face (not for the first time) a full-blown debt repayment crisis, with the dollar rising to unprecedented levels in past weeks, which the new government is desperately trying to douse.

What then are the key lessons to learn so that we can move towards prudent macroeconomic management? First, convince the IMF not to impose prior conditions that will result in a very hard landing and to agree to a gradual and not sudden compression in aggregate demand. Second, have better coordination of the fiscal and monetary policy while respecting State Bank autonomy. Third, and most important, start rebuilding your foreign exchange reserves especially by attracting new foreign investment. In future, draw a red line below which the foreign exchange reserves must not be allowed to fall.

The writer is professor of economics at the Lahore School of Economics and former vice chancellor of the Pakistan Institute of Development Economics.

Published in Dawn, June 17th, 2022

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posted by S A J Shirazi @ 6/28/2022 05:37:00 PM,

Federal Budget 2022-23

Pakistan Economic Survey 2021-22 

Federal Budget 2022-23

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posted by S A J Shirazi @ 6/10/2022 09:35:00 AM,

Farewell MBA 2022

The Lahore School of Economics hosted a grand farewell on Friday 13th of May 2022, in honor of this year’s graduating classes of MPhils, Executive MBAs and the full-time MBAs. Dr Rashid Amjad, a Professor of Economics and Director at the Graduate Institute of Development Studies, and Dr Sohail Zafar, Dean of Business School, attended the farewell, as did many faculty members.


The function was held after a hiatus of a couple of years due to the impact of Covid, and thus there was a lot of excitement amongst the graduating classes. And the three sections of the MBA cohort who presented on stage did not disappoint the audience.


The highlight of the program was a sterling performance by Rab Nawaz, MBA candidate, who sang a difficult rendition. Many other candidates sang as well, many presented short but hilarious skits highlighting their experiences, and others performed well-prepared choreographies even though the time for preparation for short given the impending exams. Ghazals were sung, with some twists upon the words, with the audience giving raucous support to all the presenters.


At the end there was a dinner but many candidates were seen as photographing their friends, or being photographed by them. The farewell is a time-honored ritual which puts a closure on a very intense period of learning at the Lahore School for the MPhils, the Executive MBAs and the full-time MBAs.


It is hoped the 2022 batch will equal if not surpass the achievements of its predecessors.



Photo Album

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posted by S A J Shirazi @ 5/16/2022 02:23:00 PM,

Strategic Management


Mr. Qasif Shahid, CEO at Finja Lending Services (Ltd.) with studemnts of Lahore School of Economics on Thursday, April 28, 2022 after giving a talk to BSC IV students who are enrolled in the course of “Strategic Management”.

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posted by S A J Shirazi @ 4/29/2022 12:44:00 PM,

Business Policy


Mr. Khurram Javaid, Head of Marketing & Sales at Fauji Foods (Ltd.) visited the Lahore School of Economics on Thursday, April 28, 2022 and gave a talk to MBA II students who are enrolled in the course of “Business Policy”. He discussed Business opportunities and Market penetrative strategies in depth.

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posted by S A J Shirazi @ 4/29/2022 12:40:00 PM,

Analysis of Financial Statements & Reporting


Shahzad Saleem, CEO at The Pakistan Credit Rating Agency Limited (PACRA) visited the Lahore School of Economics on Tuesday, April 26,2022 to give a talk to MBA students of “Analysis of Financial Statements & Reporting ”.

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posted by S A J Shirazi @ 4/27/2022 11:31:00 AM,

Entrepreneurship and SME Management


Saad Khan, CEO at Active Media visited the Lahore School of Economics on Tuesday, April 26,2022 and gave a talk to BBA IV students who are enrolled in the course of “Entrepreneurship and SME Management”.

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posted by S A J Shirazi @ 4/27/2022 10:42:00 AM,

Entrepreneurship and SME Management


Mr. Salman Danish, Group CEO at Catalyst Ventures Pakistan visited the Lahore School of Economics on Friday, April 22, 2022 to give a talk to BBA students who are enrolled in the course of “Entrepreneurship and SME Management”.
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posted by S A J Shirazi @ 4/22/2022 03:03:00 PM,

City Campus

104 - C, Gulberg III,

Lahore, Pakistan.

Phones: 92-42-35714936, 38474385

Fax: 92-42-36560905

Main Campus

Intersection Main Boulevard Phase VI

Burki Road

Lahore, Pakistan.

Phones: 36560935, 36560939


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