ISLAMABAD: In the context of a new IMF program and upcoming budget for FY 2024-2035, Pakistan’s economic stabilization reforms need to have a human face to promote balanced recovery and inclusive growth that does not burden the people and improves the country’s human development indicators.
This was the consensus amongst leading national and international policy experts who spoke at a high-level panel discussion on national economic reforms organized by UNDP, SDPI, and the World Bank as part of the Prosperity for Pakistan initiative.
Moderated by senior economic journalist, Khurram Hussain, the panel discussion featured Dr. Shamshad Akhtar, Former Caretaker Minister for Finance and Revenue; Ms. Kanni Wignaraja, U.N. Assistant Secretary-General, UNDP Administrator and Regional Director for Asia- Pacific; Mr. Tobias Akhtar Haque, Lead Country Economist and Acting Country Director, World Bank Pakistan; and Dr. Abid Suleri, Executive Director, SDPI.
Dr. Shamshad Akhtar highlighted the need for a whole-of-government approach for reforms. “Macroeconomic stability has to be our religion,” she argued. “We have to make sure that it is adequate to get us out of the low and volatile growth trap, and it should be re-enforced by bold structural reforms. The single most important obsession the country should have is revenue enhancement and export earnings.”
UNDP Regional Director, Ms. Kanni Wignaraja highlighted the findings of UNDP’s 2023 Integrated SDG Insights Report for Pakistan showing that the country is on track to achieve only 35 out of 169 SDG targets. “The road to Agenda 2030 will be long and tough,” she said.
“Achieving an ambitious growth target will require steadfast political will, consistency in policy reforms, and innovative policy solutions with an eye toward enhancing productivity, revenue, and financing. Any country where half the population does not have the same opportunity cannot be a prosperous country.”
World Bank’s Tobias Haque identified regressive subsidies in energy, fertilizer, and gas sectors and the fiscal cost of state-owned enterprises contributing to fiscal pressures in Pakistan. “The burden of reforms need to be spread more broadly and further measures to increase tax returns should be targeted at the top of the income distribution,” he advised.
Addressing climate vulnerability and climate financing, Dr. Abid Suleri of SDPI stated: “More than climate vulnerability, Pakistan’s negotiations on climate financing should be centered around the private sector climate equity and community response in the wake of 2022 floods.” Earlier at the event, UNDP Pakistan Resident Representative welcomed the guests.
“We anticipate that stabilization policies will continue over the next 3-5 years, and to be successful, these policies need to be people-centric and address economic injustice,” he said. The participants agreed that the Government needs to balance economic recovery with stabilization, to create income and livelihood opportunities for the people, and discussed the National Economic Recovery Plan focused on the following reforms:
• Ensuring solvency, revenue and fiscal sustainability;
• Bending the political economy of Pakistan toward economic justice and good governance:
• Reducing deficit through inclusive growth and effective import-export management;
• Transitioning to green economy;
• Ensuring social protection and social safety nets to minimize the adverse impact of structural reforms on the most vulnerable.
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