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Express Tribune

Published Date: Sep 13, 2012

GROWTH RATE OF 3% IS MEANINGLESS, SAYS HAQUE

Leading regional economists have questioned Pakistan’s approach of ‘exclusive growth’ and urged the country’s economic managers to think about including all segments that will help push the sluggish growth rate up.

On the second day of the fifth round of South Asia Economic Summit here on Wednesday, the experts seemed to be taking an exception to Planning Commission Deputy Chairman Dr Nadeemul Haque’s comments about ‘inclusive growth’.

“I don’t know what inclusive growth is…Pakistan is in crisis since 3% growth means nothing and at this rate there cannot be inclusive growth,” Haque said.

His comments generated a debate not only in the session he chaired, but also in follow-up sessions.

Responding to Haque’s views, the Chief Economist of United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP), Dr Nagesh Kumar, said “inclusive is a way to enhance growth” and Pakistan can enhance its growth rate by adopting the inclusive approach.

Other experts also stressed that Pakistan or any other country can double its growth rate by adopting an inclusive growth model. A 5% growth rate is better if dividends of growth reach 80% of the population compared to a higher growth rate, say 8%, when dividends are limited to only 5% of the people, said the experts.

Akmal Hussain, a distinguished professor in Forman Christian College, said in order to achieve higher growth the country needs to build equity in the growth process. The path of development lies in opening up institutions to middle and poor classes, as equity is a means for higher growth, he added.

“Except for Pakistan, all the regional countries are on the trajectory of growth,” said Mahabub Hossain, Executive Director of Bangladesh Rural Advancement Committee.

The participants also highlighted the challenges the region is facing due to the global crisis. Dr Nagesh Kumar said the Asia-Pacific region has already started getting affected from the crisis as exports have plummeted, resulting in slowdown of economic growth.

He said the UN-ESCAP has already lowered the growth projections for the South Asian region for 2012-13. Pakistan’s growth projection has been lowered to 4% while India’s to 6%, he added.

He said while there is a need to consolidate markets in the South Asian Association for Regional Cooperation (Saarc), there is also a need for integration of regional markets and creating a broader Asia-Pacific integrated market.

Kalpana Kochhar, chief economist of the World Bank for South Asia region, said the centre of global economic gravity was shifting to Asia that poses many challenges as the region is not yet ready for this change.

She said in order to benefit from the emerging situation, there is a need to integrate the South Asia region in the medium term. This also requires trade in energy, goods and services and promotion of transit trade.

In his concluding remarks, Haque said the region is worried about the impact of global crisis, but not yet talking about internal crises.