Published Date: Mar 29, 2018
Economic policy must respond to needs: minister
LAHORE: Punjab Finance Minister Dr Ayesha Ghous Pasha has said the Punjab government believes in a consensus economic agenda and engages diverse stakeholders, including private sector and academia to come up with an enabling economic policy for exports and manufacturers.
Speaking at a symposium titled ‘State of the economy and future priorities’, organised by Friedrich-Ebert-Stiftung (FES) Pakistan and Sustainable Development Policy Institute (SDPI), here on Wednesday, the minister said the Punjab government’s approach regardless of who was coming to power was that the economic policy must be responding to real needs and aspirations of all stakeholders.
The symposium was clubbed with the launch of two books related to Pakistan’s national economy including ‘Growth and inequality in Pakistan’ by Dr Hafiz A Pasha and ‘Pakistan’s Agenda for economic reforms’ by Dr Vaqar Ahmed.
The excerpts from both the books were shared with the participants comprising leading economists, representatives from trade and business communities and media highlighting diverse aspects and issues pertaining to state of economy with federal as well as provincial lenses.
The finance minister said the Punjab government also believes that an economic policy should be export oriented, led by private sector and in alliance with sustainable development goals (SDGs). “We must acknowledge that in Pakistan, we have always been good in coming up with policies but lack implementation. Therefore, we are focusing on developing mechanisms for proper and better implementation on policies”, she asserted.
She said high cost of energy and non-enabling tax mechanisms have been major constraints for investors and manufacturers and with the help of consultation with stakeholders, ‘our government was seriously working on removing all these impediments and the forthcoming provincial budget would be reflective of this approach’. She added: “The investment that took place in Punjab was result of our growth rate policy whereas in Khyber Pakhtunkhwa, it was based on development funds that province received for its particular situation.”
Eminent economist Dr Hafeez A Pasha on the occasion said that the future economic agenda of the government must respond to critical challenges that were stemming from a fragile state of economy. At a juncture when the nation was all set to undergo new elections, the experts busy discussing national economic agenda beyond CPEC and some key economic reforms becoming crucial for future economic roadmap, an equitable economic structure had become more significant.
Dr Hafeez A Pasha suggested that water scarcity should be matter of urgent priority for the government whereas privatisation of at least 11 state owned entities including PIA and Steel Mills must be a top priority. Likewise, the manufacturing sector needs to be strengthened whereas the tax systems which at present could be termed the most inefficient in the world should be rendered to a complete overhaul.
He said Pakistan needs to change its economic thinking and while keeping the grave realities in view, should focus on transforming our economic thinking as a policy process. However, the crisis that Pakistan likely to face in the near future will be the outcome of structural factors affecting the economy. To overcome the looming crisis, he stressed the need to initiate a common economic agenda of self-reliance through political consensus.
Earlier, Dr Vaqar Ahmed, Joint Executive Director SDPI, informed the participants that SDPI has recently conducted a survey of over 250 private sector entities comprising current, new or potential exporters. The survey revealed that Pakistan’s merchandise exports were continually facing multifarious issues. Thus, a delay of an effective trade policy has become an exacerbating issues, he said and added cost of energy is still the largest item on balance sheets of industrial exporters.
He said the unit cost of electricity and gas as well as opening up of tax authorities in all provinces tax compliance cost has been increased. The tax and other relevant regulatory bodies were not coordinating among themselves to expedite customs and trade facilitation reforms which could greatly bring down the cost of doing business, he added. Likewise, he said, another key cost is the transportation and warehousing expenses, especially in the case of high value or perishable items.
Dr Vaqar said that there was a dire need to improve the consultation around implementation of National Transport Policy 2017. Lack of banking channels at potential export destinations was preventing new demand for Pakistani products whereas the government offices responsible for export promotion including Pakistan’s embassies abroad were having weak engagement with exporters at home, he said and added the fiscal support packages announced by the Prime Minister were accessible only by large exporters whereas such packages should only be given to new and potential exporters with innovative ideas.
He explained that the lack of product certifications and compliance with required product standards was not allowing optimal gains from free trade agreements and GSP+ scheme allowed by European Union. Most importantly, the regulatory burden and related costs faced by businesses have increased over time and it now takes longer to obtain or renew production permits and no-objection certificates, he included.
Abdul Qadir while representing FES informed the participants that the objective of holding this discussion was to solicit suggestions and recommendations from the stakeholders for desired policy actions.
The leading experts from different sectors of economy also shared their views with the participants and highlighted a host of challenges related to correcting national economy. The experts suggested that keeping the nature of challenges, a national political consensus was need of the hour to reach at fundamental economic reforms as a way forward for our national economy, he added.