LAHORE:
Addressing the Pakistan Medium Term Economic Prospects Conference at the Lahore Chamber of Commerce and Industry (LCCI), former Federal Finance Minister Dr Hafeez Pasha highlighted the country’s ability to overcome the current economic challenges. He pointed out that while Pakistan had endured difficult economic conditions in the past, it had managed to navigate through them.
Pasha noted that Pakistan’s average GDP growth over the past four years was 2.5 percent, reflecting the rate of population growth. This stagnant income growth highlighted the need for economic reforms. He cited factors such as the impact of COVID-19 and natural disasters such as floods as obstacles facing the economy.
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Highlighting statistics, Pasha pointed out that over the past 15 years, exports have grown by only 2% per year, while imports have grown by 8% to 9% per year. This trend has led to a widening of the current account deficit, which stood at $19 billion in 2017-18, with external debt exceeding $130 billion. In addition, unemployment had risen to 10.5%, with poverty rates climbing from 33% to 45%.
LCCI chairman Kashif Anwar echoed these concerns, particularly highlighting the negative effects of rupee depreciation on inflation and external debt. He stressed the urgency of addressing issues within state-owned enterprises, in favor of privatization or restructuring. In response to these challenges, the former finance minister proposed various solutions. He emphasized the importance of boosting exports and tax revenue, suggesting the reintroduction of schemes such as the bonus voucher system from the 1960s to incentivize exports. Drawing inspiration from the Bangladeshi model, he suggested diversifying the tax base to include sectors such as agriculture and real estate.
Published in The Express Tribune, March 19u2024.
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