ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, terming governance instability and policy discontinuity as major barriers to economic progress, stressed the need for accessible data, evidence-based research and policies to advance national development goals, including increasing exports from the current around $30 billion to $100 billion.
This, he stated, while addressing at the inauguration of the 5th RASTA Conference, organised by Pakistan Institute of Development Economics (PIDE). He said that biggest challenge of the country is how fast it grows its exports, which would determine development and achieve the $100 billion export target.
The minister said that with 22 critical years ahead, the country must sprint forward, eliminating inefficiencies and embracing structured, data-driven policymaking. China, South Korea, and Singapore as examples of nations have successfully leveraged scientific planning, phased implementation, and policy consistency to achieve economic success, while Pakistan continues to complicate simple problems. Research, he stressed, must move beyond academic papers and integrate into industry, governance, and economic policies.
Despite billions invested in STEM education, he cautioned that without proper application, these investments risk becoming wasted opportunities. He said that between 2013 and 2018, Pakistan eliminated power shortages, secured $25 billion through CPEC, and improved security.
However, political disruptions halted this momentum, proving that economic success is impossible without stability. As a way forward, he called for rapid export expansion, resource optimisation, and structured economic planning.
Dr Hafeez Pasha, former finance minister said that the overall buoyancy coefficient of total tax revenue to GDP in recent years is low at 0.88, which needs to be augmented. He said that according to a 27 cross country analysis of the determinants of the tax-to-GDP ratio, the magnitude of this ratio should be higher in Pakistan by at least 1.4 percent of GDP.
Application of the representative tax system approach to the same 27 countries including Pakistan reveals that tax-to-GDP ratio should be higher by 3.1 percent of the GDP. Direct taxes need to be higher by 2.2 percent of the GDP and indirect taxes by 0.9 percent of the GDP.
He said that the overall federal “tax gap” is estimated at 3.8 percent of GDP while the provincial tax gap is estimated at 1.6 percent of GDP. Given the findings, a feasible target for raising the tax-to-GDP ratio is by up to 3.5 percent of the GDP from 2024-25 to 2026-27. This will still leave some revenue potential to be exploited in subsequent years.
Already, the estimates are that the taxation proposals in the federal budget of 2024-25 will raise the tax-to-GDP ratio by 1.2 percent of GDP. Therefore, the target of additional revenues from the tax reforms is 2.3 percent of GDP. The IMF programme target is three percent of GDP.
The objective of the conference was to reaffirm the commitment to evidence-based policymaking, economic innovation, and research-driven reforms. The conference brought together renowned academics, policymakers, and development experts, fostering an open exchange of ideas on Pakistan’s economic future, Dr Pasha added.
Dr Muhammad Nadeem Javaid, vice chancellor of PIDE, emphasised that PIDE is not just a think tank; it is a bridge between research and action. He outlined a vision for strengthening Pakistan’s policymaking landscape through new initiatives designed to ensure that research translates into real impact. He announced the establishment of a Policy Lab that will provide real-time, data-driven solutions for governance and economic challenges.
To further enhance the quality of research and policy recommendations, PIDE is implementing a rigorous research funding mechanism that prioritises high-impact, evidence-based studies. Additionally, a recruitment drive will bring in 90 top researchers and policymakers purely on merit. As part of a broader initiative to integrate academic research with policymaking, PhD students will be placed in economic ministries, where they will work on real-world policy challenges while developing their research theses.
Dr Faheem Jehangir, director policy at PIDE and project director RASTA, provided insights into RASTA’s expansion over the past four years. The initiative has cultivated an extensive knowledge network, collaborating with 70 local universities, 12 international institutions, and over 4,300 researchers, practitioners, and academicians.
The Competitive Grant Program (CGP) has received 1,664 applications across seven rounds, but to maintain quality and impact, only 90 research projects (7.8 per cent selection rate) were funded. Of these, 65 have been successfully completed, while the remaining 25 are being presented at this conference.
In parallel, the Demand-Driven Research (DDR) Programme, which addresses government policy needs, has funded 33 government-driven projects, with 22 completed and publicly accessible. The conference also featured several technical sessions on technology-driven economic growth, fiscal management, and governance efficiency.
Copyright Business Recorder, 2025
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