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Pakistan’s Top Economists Suggest Way Forward: Book Launch

Dr Ishrat Hussain, former Governor State Bank of Pakistan and Director IBA Karachi called for bridging the gap between policy-making and research. He also called for a balance between civil servants who should look at pure technical feasibility of proposals, and politicians, who should assess their political feasibility. He said that implementation and delivery of services was the crux of the problem rather than ‘good’ economic policies. He also recommended minimal role of federal government and a separation between regulatory bodies and policy-making, as well as supporting the operational autonomy of companies’ Board of Directors. He was chairing the launch of a book edited by Dr Rashid Amjad and Mr Shahid Javed Burki, Pakistan: Moving the Economy Forward on Thursday 30th May at the Lahore School of Economics, Main Campus, Burki Road. He appreciated the editors of the book for publishing it in a short period of time and for its timeliness and the potential assistance it could provide to the new government in Islamabad.
Introducing the book, Dr Amjad, who is Director of Graduate Institute of Development Studies at LSE, said that the central question which the book addressed was how to reverse the current prolonged period of low growth and high inflation in the country –stagflation - over the past five years, and to suggest and implement measures that would decisively move the economy onto a higher, more sustainable growth path. He put forward eight key messages namely to revive investment, the structural rather than cylical nature of Pakistan’s problems, overcoming growth constraints, the major growth drivers, improving economic management and reducing corruption, inclusive as opposed to merely sustained and higher growth, the responsibility of federating units and the role of state and private sector. He also recommended increasing investment from the current 12.5% of GDP to 30% to generate enough productive employment to compete internationally.

The Chief Guest Dr Hafiz Pasha, former Minister of Finance and Dean of the School of Social Sciences at Beaconhouse National University said that the book was perhaps the best book to have come out on the subject in some time and requested the editors to find an opportunity to present it to the incoming economic managers, adding that the book should be prescribed for all postgraduate courses on Pakistan’s economy. Speaking about his book chapter on Pak-India trade, he opined that the time had come to replace the failed formula of ‘Peace First, Trade Later’ with India by ‘Trade Earlier’ and to create a constituency of peace through trade. He highlighted the distortion of trade between the two countries resulting in the fact that Pakistan mainly exported industrial goods to India while importing primarily agricultural goods. He advocated a policy of careful gradualism with India, especially in the import of medicines and supported conditional granting of MFN status to it.

Summing up the discussion, the discussant former Chief Economist Planning Commission Dr Pervez Tahir said that the most important message of the book was the rehabilitation of investment as a key driver of growth. He praised the chapter on remittances market co-authored by Dr Amjad as well-researched and contributing important insights into the way black money was being whitened in the country.
Dr Aisha Ghaus Pasha lamented the low tax to GDP ratio in Pakistan and after a comparative analysis of Pakistan with thirteen foreign economies, came to the conclusion than that direct taxes required urgent attention, as well as redressal of the exemptions and concessions culture in the country and the problem of tax evasion. She further recommended effective taxation of agriculture, assets and turnovers, and the rationalization of tax rates, as well as broad-basing value- added tax, improving the tax administration and introduction of automation and IT.
Dr Naved Hamid highlighted the lessons from the past and the way forward in terms of identifying the drivers of exports in manufacturing, agriculture and services, as well as the opportunities and pitfalls for Pakistan’s trade with its neighbors China, UAE, India and Afghanistan.
Dr Teresa Thompson Chaudhry reconceptualized the definition of poverty to incorporate newer analyses, and said that the number of non-poor have increased in Pakistan in the period 2004-2010, although the urban areas have fared much better in this respect than the rural areas. She also stressed that Punjab was the only province which had seen major improvements in poverty-reduction, while significant disparities existed in Khber-Pakhtunkhwa and Balochistan.

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posted by S A J Shirazi @ 5/30/2013 01:30:00 PM,

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