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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,312
1224hr
Pakistan Cases
1,266,204
55424hr
1.32% positivity
Sindh
466,432
Punjab
438,271
Balochistan
33,138
Islamabad
106,543
KPK
177,038

ISLAMABAD: The National Economic Council (NEC) and the Council of Common Interests (CCI) need to be strengthened for providing political administrative platform for a devolved system to come together and do decision-making, which works best for the majority of the country, said Asad Umar, Minister for Planning, Development and Special Initiatives.

"Democracy is not anti-development and Pakistan as a democratic [country has] done well economically compared to dictatorship era. I strongly believe in a democratic Pakistan," said Umar, while addressing a webinar "Role of the state in economic development", organised by the Institute for Policy Reforms (IPR) here on Saturday.

He said the ministries of industry and planning have a broader integrated role in implementing industrial policies for overall development. The rules of the government of Pakistan still said that but the reality is that since 1988 Pakistan has been constantly on the International Monetary Fund (IMF) program.

"When you go into an IMF programme then you need to have one central pillar, who will be responsible for delivering what has been agreed upon in the programme and that task has been assigned to the Finance Ministry," said the minister, adding that the shots on the economic strategy are called by the Finance Ministry, and that is why almost all the time, the finance minister has to chair Economic Coordination Committee (ECC), but that was different back in 60s.

Umar further said that Prime Minister Imran Khan has said couple of times to him that he wants the old Planning Commission back.

"I think, first we have to get out of the IMF programme or put ourselves on sound fundamentals of macroeconomic stability before we can go towards that," he added.

He further said that Pakistan as a democratic country has done well economically. Democracy is not anti-development and the option of a very centralised system is not available to the countries like Pakistan which are multi-ethnic realities.

Pakistan cannot be run successfully through anything except democracy. Responding to a question that Pakistan did well during the dictatorship, Planning Minister said that it depends on one definition of doing well.

Ayub Khan and Yahya Khan 13 years ended with creation of Bangladesh. The Zia era ended politically with Sindh turmoil. The Musharraf era ended with Balochistan up in arms. So if you want to run a multi-ethnic Pakistan, it has to be a devolved system. He said that Pakistan has to be run as a devolved state and there are no two ways about it.

The devolution process should not be held back but needs to be taken further. If you have to turn Karachi around you have to have a local government system in place not just in Karachi but all over Pakistan. But for a devolved system, you also need to put in place institutional structure, which allows for cooperation between these different institutions tiers especially in multi-parties' democracy. So that you are able to work together, while taking decision under the law, he added.

"The two institutions we need in Pakistan to be strengthen, one is NEC and the other is CCI. These two institutions provide the political administrative platform for a devolved country to come together and do decisions making, which works best for the majority of the country."

He said that he is of the view that this mantra, which is very popular in Pakistan that the government has no business of being in businesses. It is a nice catchy line but is not necessarily true. He said State-owned enterprises (SOEs) can play an important role and have seen in playing in Pakistan such roles.

He said that 21st Century economy should be private sector led. The real innovations and entrepreneurship by and large could come, is to be led by private sector. The state's most important role is to create conditions where competitive behavior take shape, where there is risk taking, where there is innovation and those who do innovative work in market place are to succeed, he added.

He said that Pakistan should see private sector-led growth, which should not take place in a pure theoretical environment. Further it should be made sure that there is a competitive market place which allows the emergence of these innovative risk taking entrepreneurs which Pakistan desperately needed.

At the same time, he said that state should make strategic intervention and get the economy moving which has a spillover effect, adding that the state has to play multiple roles.

"I believe on a selective base and time-bound intervention of the government," he added.

Hummayun Akhtar Khan, CEO IPR said that for over quarter of the century, Pakistan has been borrowing excessively from abroad to meet all kinds of shortfall.

The country borrows to meet imports requirement, to service past debt and even to meet current expenditure and only 1/3 of the borrowed actually goes to development expenditure and that is why debt is continually growing.

He further said that the external debt has gone up more than three times during the last 20 years, and have paid principal and interest more than what was borrowed. Khan said that the share of GDP in productive sector such as agriculture and manufacturing is declining.

The economic growth mainly comes from the services sector, said Khan, adding that the exports-to-GDP ratio was over 17 percent in 90s, which is nine percent. We need the economy to grow, increase exports and create jobs for young force and that the state must play its role in achieving these objectives and ensure investment in infrastructure needed by private sector, and the state must invest in people as well.

Copyright Business Recorder, 2021

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