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Published Date: Jul 5, 1993

Note on the First Meeting of the Prime Minster’s Task Force on the Economy (P-8)

The following is an outsider’s impression of the task force meeting. The major area of concern is that long term consequences of actions were relatively neglected during the discussions. This goes against the grain of the terms of reference of the group, namely to identify not only short run actions, but also immediate steps that need to be taken to initiate a long run process of reform. My view is that most of these cases fall into a single category, in which the past mismanagement has led to the creation of real or perceived property rights. As a result, attempts to rationalize the structure will lead to resistance, since it deprives people of some property; examples are imposition of WAPDA tariffs on tubewells, imposition of agriculture income tax, and even the resistance of some provinces to WAPDA’s privatization. In this case, the political problem cannot be ignored or bulldozed over. The correct economic solution is to buy out the property rights from the individuals or institutions.

In addition to this, some assumptions need to be questioned. Below are a few specific examples of both the above problems.