The World Bank criticizes the subsidies

Islamabad:

World Bank Chief Economist and Debt Executive Country Head for Pakistan Tobias Haque has denounced regressive subsidies in the energy, fertilizer and gas sectors and said the fiscal costs of state-owned enterprises are contributing to fiscal pressures in Pakistan.

Discussing economic challenges and development opportunities at a session jointly organized by the United Nations Development Program (UNDP) and the Sustainable Development Policy Institute (SDPI), Haque said the burden of reforms must be spread more widely and further action to be taken. with the aim of ensuring an increase in tax returns at the top of the income distribution.

Under a new IMF program and the upcoming budget for fiscal year 2024-25, Pakistan’s economic stabilization reforms must have a human face to promote a balanced recovery and inclusive growth that does not burden people and improves human indicators. development of the country.

This was the consensus among leading national and international policy experts who spoke at a high-level discussion on national economic reforms organized by UNDP, SDPI and the World Bank as part of the ‘Prosperity for Pakistan’ initiative.

Former caretaker finance and revenue minister Shamshad Akhtar stressed the need for a “whole of government” approach to reforms.

“Macroeconomic stability must be our religion,” he argued. “We need to make sure that it is sufficient to get us out of the low and unstable growth trap, and it should be bolstered by bold structural reforms. The single most important obsession the country should have is increasing revenue and export earnings.”

UNDP Regional Director Kanni Wignaraja highlighted the findings of UNDP’s Integrated SDG Insights 2023 Report on Pakistan which showed that the country was on track to achieve only 35 of the 169 SDG targets. “The road to the 2030 Agenda will be long and hard,” he said.

“Achieving an ambitious growth target will require sustained political will, consistency in policy reforms and innovative policy solutions aimed at boosting productivity, income and finance. Any country where half the population does not have the same opportunities cannot be prosperous,” Wignaraja added.

Addressing climate vulnerability and climate finance, Dr Abid Qayyum Suleri said: “More than climate vulnerability, Pakistan’s climate finance negotiations should be centered around private sector climate equity and community response. in the wake of the 2022 floods.”

The UNDP Resident Representative in Pakistan said “we expect stabilization policies to continue over the next three to five years and to be successful, these policies must be people-centred and address economic injustice”.

Participants discussed the national economic recovery plan focused on the following reforms: Ensuring solvency, revenue and fiscal sustainability. bending the political economy towards economic justice and good governance; reducing the deficit through inclusive growth and effective import-export management; transitioning to a green economy; and ensuring social protection to minimize the negative impact of structural reforms on the most vulnerable people.

Published in The Express Tribune, April 25^u2024.

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