CPEC not enough to sustain economic growth; need stressed for structural reforms

KARACHI: China-Pakistan Economic Corridor (CPEC) provides a new narrative for Pakistan's economy, however it is important that dividends of CPEC are offered to neighbouring countries which in turn will create regional trade and investment value chains.

This was stated by the speakers and discussants at a discussion session "Beyond CPEC: An Agenda for Competitiveness & Structural Reforms in Pakistan" Organized here on Friday at the Karachi School of Business and Leadership (KSBL).

The session commenced with an introductory note by Dr. M. lmran Chaudhry (Assistant Professor Business Economics & Finance, KSBL).

The speakers deliberated how the dividends from infrastructure and related assistance under CPEC will remain unrealized if Pakistan does not move towards expediting macro-level reforms that help competitiveness of private enterprise. While some pending structural reforms in the areas of economic governance are the key to growth and sustainability of micro, small and medium enterprises in Pakistan.

The discussion also focused on how lack of coordination across development plans and budgets of federal and provincial governments are leading to multiplicity of similar development schemes with in and across provinces, in turn leading to wastage of scarce resources and adding to the burden of budget deficit.

Dr. Vaqar Ahmed explained a two-pronged approach to reform where on the first hand economic managers need to focus on structural measures that address challenges in the areas of taxation, trade policy, energy and labour market. Second, federal and provincial governments need to collectively discover new levers of future economic growth.

Dr. Zeeshan Ahmed (Dean KSBL & Associate Professor of Finance) while moderating the session, informed the audience that there is a need to go a step ahead from recent literature on Pakistan's economy, and focus on why reform of institutions dealing with economic policy regulation and management is imperative.

During the open discussion session, the need to fix responsibility for expediting economic reform was stressed.

The representatives from the business community agreed that with the use of appropriate social accountability tools and policy engagement methods, strong lobbying for reforms that promote competitiveness of Pakistan’s manufacturing sector can be ensured.

The audience varied from students across universities in Karachi, industry professionals and academics interested in the changing landscape of the economy, and multilateral relationships in the region, in wake of the CPEC program and its resounding impact.