KARACHI: Economic experts at a post-budget conference here on Sunday called for indigenous solutions and structural reforms in order to achieve sustainable growth, saying heavy reliance on international lending agencies may not steer the country out of the economic quagmire.
In his keynote address on the topic ‘economy and Industry’ Dr Khaqan Hassan Najeeb, senior economist and public policy expert said that balance of payments and fiscal deficit are amongst the ‘chronic’ structural issues of country’s economy. “Professionalism is a missing link in public policy making,” he said, seeking induction of competent human resource in public sector entities.
The post-budget conference was organized by the Institute of Chartered Accountants of Pakistan (ICAP), simultaneously in Karachi, Lahore and Islamabad.
Dr Hassan said completing the IMF program is necessary but not sufficient for economic stability as much more is required to cure underling issues to prevent recurrence symptomatic balance of payments crises which Pakistan seems to have missed on this account. Pakistan needs structural reforms, he said, adding loss-making state-owned enterprises (SOEs) have worsened the fiscal crises.
Our economy is dependent on borrowing from international lenders, he added, suggesting the policymakers to give more focus on long-term domestic growth.
During a panel discussion, Chief Executive Officer (CEO) Business Recorder Group Wamiq A Zuberi highlighted the fault lines in country’s economic structure, saying that the bulk of our revenue is generated through imports. “Over 50 percent of our revenue comes from imports.”
He said development is the job of provinces after 18th amendment, questioning why such huge amount has been allocated for federal public sector development program (PSDP). He said the only way to deal with IMF is if the government addresses public sector expenditure issues. On SOEs, he commented its better to give salaries to employees at home rather than operating these enterprises.
Zuberi appreciated government’s efforts towards IT and agriculture sector, stressing the need of mechanization of agriculture to improve productivity. Zubair Motiwala Chief Executive (CE) Trade Development Authority of Pakistan (TDAP) said the government in this budget has done nothing for exports enhancement.
He said Pakistani exports are regionally uncompetitive due high rates of utilities such as gas and electricity. Interest rate has gone up to 24 percent. Drawback of Local Taxes and Levies (DLTL) amount, which was returnable to exporters, has been frozen by the government.
He said industrialist don’t really want any subsidy. They want ease of doing business along with reasonable utility prices.
He thanked the government for announcing the Prime Minister-led council of exports.
Economist Syed Asad Ali Shah said the fiscal deficit causes current account deficit. He said actual fiscal deficit would likely be Rs 14 trillion this financial year as against the government’s figures of Rs 6 trillion. He also stressed upon the need to curtail public sector expenditures.
However, Dr Waqar Ahmed said that despite minor relief given to start-ups in budgetary proposals 2023-2024, there has been no structural shift in tax policy towards the manufacturing sector.
Copyright Business Recorder, 2023