ISLAMABAD: Islamabad Policy Institute (IPI) on Wednesday called for a national reconciliation process to restore political stability and advocated for a comprehensive debt restructuring as an essential measure to rescue the country's faltering economy.

These recommendations are contained in a report published by the think tank titled, “Mapping the Policy Agenda 2024–2029”.

The report analyses the key challenges faced by the country and proposes a comprehensive strategy to address them. It recommends political reconciliation through dialogue, strengthening democratic institutions while redefining the military's role, implementing economic reforms focused on subsidies, fiscal management, taxation, and debt restructuring, countering security threats by remapping militant landscape and addressing radicalisation, resolving the Balochistan issue politically, and empowering the Foreign Office to prioritise economic diplomacy.

The report identifies the lack of political stability as the foremost issue and notes that only by restoring stability in the political realm can the government gain the necessary breathing space to address governance challenges. In this regard, it suggested initiation of a comprehensive dialogue and reconciliation process.

Faisal Ahmed, head of research at IPI, stated that such a process should recognise and address the concerns of all involved parties so that a common ground that facilitates constructive engagement and dialogue can be found.

The report suggested that the reconciliation process should be owned and backed by the military. This, it argued would legitimise the process, ensuring broader acceptance among the public and political entities, and foster trust among political factions, encouraging essential dialogue and compromise.

This would provide the stability that is crucial for economic reforms and attracting foreign investment.

For tackling the economic crisis, it was proposed that the government should push for a comprehensive debt restructuring plan that would relieve financial pressure and spare scarce resources for critical sectors.

“Without decisive action, the risk of following in the footsteps of countries that have suffered under the weight of unsustainable debt is all too real. Restructuring offers a viable alternative, one that requires courage, strategic foresight, and a steadfast commitment to the nation's long-term economic health and sovereignty,” the report maintained.

The report argued that many fears associated with debt restructuring are unfounded.

It proposed that institutions such as the IMF should be engaged not just as alternatives to restructuring but as supportive partners in this endeavour.

Pakistan, the report suggested, must focus on optimising key external relationships to support its economic revival. It urged empowering the Foreign Office to take a leading role in executing foreign policy, particularly adapting to prioritize economic imperatives, and spearheading the development of a national consensus on foreign policy direction among government, military, and political parties.

Additionally, for enhancing FO's capacity, it proposed induction of international trade specialists, development economists, and country experts on crucial bilateral partners. This, it emphasized, will equip Pakistani decision-makers with the necessary insights and advice for charting optimal foreign policy options.

Energy sector expert Zeeshan Tayyeb recommended significant reforms for the petroleum sector, including its deregulation and a comprehensive overhaul of related policies. He emphasized addressing bureaucratic obstacles within key entities such as the Federal Board of Revenue (FBR), Ministry of Energy, State Bank, and the Oil and Gas Regulatory Authority. Tayyeb also highlighted the need to resolve issues concerning tax refunds, turnover tax, the margins of marketing companies, and foreign exchange losses.

Establishing a framework for investment, he maintained, will attract foreign direct investment and create a competitive environment.

Copyright Business Recorder, 2024


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