Daily Times

Economic experts on Wednesday stressed the need to restructure the economy of Pakistan on an export-driven model rather than incentivizing import in order to address the balance of payments challenges.

The experts made the remarks during a seminar “Building Consensus on Pakistan’s Economic Future” organized by Islamabad Policy Research Institute (IPRI).

Speaking on the occasion, former Governor State Bank of Pakistan Dr Ishrat Hussain said during the entire 15 structural reforms Pakistan’s economy had seen through, it had been noted that there was complete consensus on reshaping the economy and driving it towards a growth-based economy.

The salient features spelt out during the seminar were that Pakistan needed a high growth rate; 1.5 million jobs are to be created to address the youth bulge in the market of whom 60 per cent are 15 years and above; need for investing in education and health and bringing around a robust social security net.

The experts noted that fiscal deficit was the root cause of all imbalances in the economy and could only be tackled by reducing expenditures and by increasing taxation.

A broad-based consensus was on revamping the civil services structures, which the panel believed was redundant, and out of utility.

Pakistan’s other woe was faulty energy policy, and industrial production was its biggest casualty.

Pakistan’s oil bill was over $18 billion and that could be reduced to 50 per cent by opting for solar, but there was no recourse owing to inefficiency.

Stress was laid on digitizing the economy and improving governance through a transparent mechanism of audit and finance.

It was observed that Pakistan’s political elite does not have the capacity to carry out structural reforms, and one of the reason was the big size of the government.

CEO of the OI Watwer Company Pvt Ltd Dr Zubair pointed out the real estate sector could contribute up to Rs400bn in taxes whereas at the moment the share is less than Rs20bn.

Broadening the tax base to the informal economy and acting against lobbies was the way out, he said.

Acting President IPRI Brig (retd) Dr Raashid Wali Janjua said that Pakistan jumped from agrarian mode to the services sector, and missed the opportunity of erecting a sound manufacturing sector.

“We need a solution-oriented prescription, and maybe we have to change the politics of the economy,” he suggested.

Dr Janjua specifically pointed out at the wastage of resources at the hands of elite capture, which have been estimated at $17.4 billion per annum.