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One casualty of the fall of the Berlin Wall in the 1990s has been 'economic policy'. It does not mean that 'Economic policy' is not required or it has become irrelevant. This subject has lost its practical significance for the reason that there has been a consensus on the major objectives that are to be followed by way of a policy. There is a unanimity of views on (i) state should not intervene in commercial activities (ii) there should be no 'protectionism' in tariff structures (iii) there is no concept of executive's dictation in monetary policy of the central bank (iv) Foreign private investment is to be liberalized (v) no control for currency convertibility and (vi) an average rate of corporate tax at 20 to 25 percent with no wealth tax.

In the unipolar world that we live in, options in economic policy matters have dwindled. There are no more 'Asia Surkh Hay' and 'Asia Subz Hay' slogans Deng Xiaopeng's Communist Party is experimenting capitalism in China and Donald Trump tried sanctions and promoted 'protectionism' in the US that claims to be a bastion of capitalism. John Maynard Keynes and Karl Marx cannot contest what Thomas Piketty has proved with facts and figures that in real terms the gulf between rich and poor has widened in the last 50 years. In short, after the 'demise' of 'economic policy' the success or failure of any state is determined by the level and competence of its Economic Planning and Governance.

The story of Pakistan in this sphere is pathetic, especially after 1970. In my view, during the 1970 to 2020 period Pakistan was seriously handicapped in the field of economic planning. We were playing a 'one day match' during five-year term of each government. The result was that continuity of policy became a casualty with change in each government. The rupee depreciated by almost 20 percent with every change of government. It needs to be examined why is it that whenever there is a new party in power all major macro-economic indicators have to be readjusted?

From 1970 onwards there is no economic plan for the country. We had five successful plans before 1970. Whatever we have today is the result of those plans. We have visions and dreams but nothing to show by way of authentic data. In our country the state of economic development is measured by the stock market index that represents less than 25 percent economic activity of the country. Speculations and manipulations are claimed as credit of a government's performance. The strength of our economy is measured on the basis of value of 'open plots' in Karachi and Lahore knowing fully well that prices are high on account of the fact that an open plot is the best place to park ill-gotten money. The government's performance is gauged on the basis of short-term fluctuations in rupee-dollar parity. This is a false yardstick to evaluate performance of a government or determine the state of the economy. For example Turkey's is a much larger and more stable economic base than Pakistan's but the value of Turkish Lira is much lower than the Pak rupee vis-à-vis the US dollar. The important aspect is the purchasing power of the local currency and the per capita income of people.

It is the human development index that is important to determine the well-being of a country's inhabitants. 'Economic planning is a requirement of the state and must transcend the needs of governments as they come and go. The economic plan must continue unhindered. Therefore, the tenure of the head of the Planning Commission should be longer enough to last beyond the tenure of a government and must overlap with the next government that assumes office to ensure continuity of policy. As against that, in the last 40 years of my active life I have seen that the first person that is removed by any incoming government is the head of the Planning Commission. It is basically for this reason that this position is not taken seriously by people.

This most important job, in economic sphere, which is never discussed in Pakistan is the post of Deputy Chairman Planning Commission. A renowned economist with Pakistan based practical experience should head the Planning Commission and the tenure has to be seven to ten years so that there is an overlap from one government to another.

In India, Montek Singh Ahluwalia was the Deputy Chairman Planning Commission covering a period of four governments. India's economic development and liberalization for open market is actually attributable to Ahluwalia and not Dr Manmohan Singh who brought him. The socialistic policies of 1970s and 1980s were the result of persons like physicist and socialist politician Madhu Danadvate. Both had their priorities that suited the country during the respective periods. Priority was the welfare of the state and not propaganda for any particular government. Seven IITs of India that successfully compete with Ivy League colleagues are all state-owned and managed. This exhibits that continuity and success of the economic policies that was ensured by the India's Planning Commission not the Finance Ministry because the finance minister changed with change of government.

In Pakistan however, we had an effective Planning Commission till late sixties. Thereafter, the planning commission has been relegated to an adjunct office of the finance ministry. The result is that adhocism rules the roost and we are saddled with problems like expensive energy/electricity that threatens the viability of the state. Pakistan will have a population of over 250 million people by 2025. Dr Manmohan Singh, the former Prime Minister of India, said at a Conference when India reached USD 10 billion in IT exports that a young population for any country is an 'asset'. However, an asset that is not handled well may become a liability. In Pakistan, we have to decide whether we are carrying an asset or a liability. A liability becomes totally unmanageable if the shop is not a going concern. This is the time to restructure the balance sheet otherwise there can be serious negative consequences.

The time period for any meaningful economic recovery is a period of around 25 years not less in any way. It is said that Jews plan for 100 years, which is not in our DNA. Nevertheless, it is a hard fact that sustainable economic development cannot take place unless we have consistent economic policies with practical plans and their diligent execution for at least a quarter of a century. We ourselves did it in the past. We should plan for Pakistan in 2045. It should not be a vision. It should be a plan. It is my suggestion that the present government should prepare an economic plan for the next five years and that plan should be linked with ultimate plan for another 25 years. The record of all the governments after 1970 is not good. This government does not carry any baggage of legacy therefore it has more responsibility to rectify.

Planning means the results lie in execution. In post 2000 world in the matter of state governance 'Regulators' are more relevant than 'Ministries'. This intermediary is actually an 'umpire' between the state and the private participant in economic activity. Regulators, in principle, should be free from bureaucratic influence. The primary requirement for a regulator is technical competence in the field and independence in action. Legally, we have all these provisions in law relating to respective regulators. Pakistan, however, political governments do not accept the fact that regulators are 'Umpires' not subservient to the executive. Important regulators in the field of economics are Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), National Tariff Commission, National Electric Power Regulatory Authority (Nepra), Oil & Gas Regulating Authority (Ogra), Pakistan Electronic Media Regulatory Authority (Pemra), Pakistan Telecommunication Authority (PTA) and some others. Can we imagine an independent but responsible media unless Pemra acts as an 'umpire' and not a player?

These regulators are required to be manned by people appointed by the executive subject to clearance from a sub-committee of parliamentarians from all parties through a 'public hearing', like in the US. The parliamentary committee should have the power to reject the person nominated by the executive. However, the next nominee will have to go through the same process. This system is working in the US and many other countries and is inevitable for Pakistan for the reason that persons appointed to position that are vital for the country's economy, are tagged to a particular political party and that impairs their ability to operate.

The regulators should be accountable before the parliamentary committees for their actions.

It is well known that Pakistan is facing a serious crisis of economic management.

There is no short-term recipe for correction. What we immediately need are at least five 5-year plans ending in 2045. Such plans are to be regulated by the regulators appointed through a process involving the parliament.

Copyright Business Recorder, 2020

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