27th Annual General Meeting and Conference of the Pakistan Society of Development Economists organized by Pakistan Institute of Development Economics, Islamabad.
Economy is now on path to recovery: Finance Minister Abdul Hafeez Sheikh
While inaugurating the 27th conference of the Pakistan Society of Development Economists, organized by Pakistan Institute of Development Economics, the chief guest, Dr. Abdul Hafeez Sheikh, the Finance Minister of Pakistan, said that the economy of Pakistan is passing through a difficult phase, which resulted from lapses in policy, external shocks and other factors. The present government inherited weak economy which was primarily a consequence of various factors, such as high fiscal deficit, which in turn resulted from high security spending and rising international oil prices. To tackle this situation, the present government has focused on the stabilization of the economy, achieving respectable growth rate, and on becoming fiscally responsible. He further identified control of fiscal deficit, increase in tax collection and participation of private sector, among other things, as key challenges facing Pakistan’s economy. Due to high fiscal deficit (over 6% of GDP), which increased because of higher security spending and rise in international oil prices in the last three years, non-development expenditures have been kept at a freeze. The Finance Minister pointed out that oil prices were 80 dollar per barrel, which remained around 100 dollar per barrel, when the present government assumed office. He also outlined the concrete steps which the present government has taken to put Pakistan’s economy on a sustained growth path. The government allocated additional 800 billion rupees to the provinces and their share in total revenue is now 60% whereas Baluchistan is given 110% additional resources from the Federation. Gilgit-Baltistan and FATA will also get more resources, he added. For the development of higher education, HEC has given 40 billion rupees. Last year GDP growth was estimated at 4.6%, which could not cross 2.6% because of floods and other shocks. Exports were 25 billion dollars and remittances reached 1 billion dollar a month. Rupees 6 billion have been collected in taxes till now. He mentioned that difficulties are being faced in managing inflation, which is now hovering around 12-13% during this period. Nevertheless, there are better signs of reducing inflation in last five months. In this regard the Chief Justice of Pakistan has been very helpful in resolving stuck-up cases of taxes and increase revenues by 100 billion rupees. He further stressed that the private sector needs to be involved to spur growth. In his address, the Finance Minister also praised the efforts of Pakistan Institute of Development Economics for its contribution to academics and policy formulation.
Earlier, Dr. Rashid Amjad Ch., Vice Chancellor, Pakistan Institute of Development Economics and the president of Pakistan Society of Development Economists said in his inaugural speech that despite many setbacks, Pakistan’s economy has shown great resilience, which is evident from the fact that it has maintained respectable growth rate for over 60 years. It has shown the ability to bounce back to its trend growth rate despite many setbacks. However, Pakistan’s economy needs new direction, which has been emphasized in the New Growth Framework, formulated by the Planning Commission of Pakistan, he added.
In the Mahbub Ul Haq memorial lecture, entitled “Arguing Inequality: Reflections on Societal Crisis”, Ashwani Saith, Dean, International Institute of Social Studies, challenged various viewpoints that have been advanced by politicians, economists, and development practitioners in support of inequality as a preferred social outcome. The presenter questioned the instrumental defense of inequality as being the grease to the wheels of commerce by highlighting the lessons learned from recent financial crisis which was an outcome of the greed of the investment bankers. Moreover, Ashwani Saith also pointed the preoccupation of some development policies on the alleviation of poverty rather than on ensuring equity.
Later in the day twelve papers were presented in the first technical session. The topics included: Growth and Entrepreneurship, Exchange Rate Dynamics, and Environmental and Energy. The session were chaired by distinguished scholars such as Dr Akhtar Hasan Khan, former Secretary, Planning and Development Division, Government of Pakistan, Islamabad, Dr Ashfaque H. Khan, Dean, NUST Business School, Islamabad. Furthermore, one panel discussion on Economic Reforms and Competitiveness was also a highlight of the day. The panelists included: Gerardo della Paolera, President, Global Development Network (GDN), among others.
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