Former Finance Minister Hafiz Pasha Monday said that non-economic
factors relating to security, terrorism and sectarian polarisation are
number one challenge to the country’s economy. Presenting Pakistan’s
country study, former Finance Minister Pasha told participants of a
seminar "Economy of tomorrow" and economic policies for inclusive and
sustainable development in South Asia" that after non-economic factors,
stabilisation of the economy is another challenge to the country’s
economy followed by governance and sufficient conditions to achieve 5 to
6 percent growth.

Pasha added that the World Bank data showed that most equal
income distribution in South Asia was in Pakistan during 1980 to 2008
and incidence of poverty had reduced considerably. The study also showed
that employment opportunities were increasing in Pakistan during the
period. He added that the story revolved around agriculture, which was
growing at over four percent and led to growth, poverty reduction and
food security. He said growth achieved during the last 28 years was not
sustained after 2008. The growth has declined to 3 percent and with high
inflation and fiscal deficit, he said the country has paid huge price
on war against terrorism. "It has impacted us economically, socially as
well as psychologically and crippled the economy," he said, adding that
the energy shortages were also responsible for low industrial output and
growth. Pasha said for him tomorrow is ‘February 2014’ and ‘Ahsan Iqbal
2025’ is too far away for him.

He said despite security, energy and governance issues the
country has achieved over 3 percent growth, which reflects its
resilience and expressed the hope that the country would repeat the
economic performance of prior 2008. He was of the view that South Asian
economies now face an immediate need for increase in regional trade,
particularly in the context of declining export markets in the global
economy.

Pasha said while the International Monetary Fund disbursed a
huge amount for the rescue of Greece, the multilateral agency allowed a
much lesser amount for Pakistan and that too with a number of stringent
conditions. He said the government has projected a 7 percent growth for
next three years whereas the IMF sees 5 percent in next five years. He
said his observations were while an autocratic government is very good
in raising economic growth overall, much more inclusive growth was
experienced in democracy. He said the previous government was able to
expand social safety net through Benazir Income Support Programme
(BISP). Mustafiur Reham from Bangladesh and Ramgopal Agarwala from India
also presented case studies for their respective countries.