Ayesha Saba

The government needs to introduce both short and long-term structural reforms for making Pakistan a stable and prosperous country, WealthPK reports. Keeping in view the current economic challenges faced by Pakistan, no single short-term policy and strategy can bear desired results. The government needs to devise a comprehensive strategy and introduce short- and long-term structural reforms to steer the country out of the prevailing economic crisis.

Prof Nadeemul Haq, the vice-chancellor of the Pakistan Institute of Development Economics, told WealthPK that there were a number of structural issues in the economy to slow down the overall growth rate. He said that the government was facing mountainous challenges, including skyrocketing inflation, massive devaluation of the rupee, rising prices of fuel and dwindling foreign currency reserves.

“Some of the major areas in which policy interventions are required include structural reforms, improving the investment climate and facilitating universal financial inclusion,” he said. He added that reforms were required in different segments of the economy, including the export sector, regulatory environment, privatisation and de-regularisation of state-owned enterprises (SOEs), tax administration, the inclusion of the informal economy and digital economy.

“Post-pandemic era calls for prioritising the digital economy for sustainable growth in the modern world. The digital economy has the ability to significantly reduce transaction cost by facilitating remote work that will not only improve efficiency and productivity but will also decrease the demand for fuel to a significant extent,” said the expert.

He said that Pakistan was dealing with the challenge of high debt. He said that improving the investment climate through reform policies was necessary. He added that fiscal management reforms would ensure the generation of higher tax revenues leading to an increase in tax-to-GDP ratio.

“Well-developed taxation infrastructure is necessary for ensuring equity, inclusivity and sustainability. On the same lines, reforms should focus on shifting towards direct rather than indirect taxation, simplification of the tax management system and broadening of the tax base through the use of technology for undertaking inclusive economic growth,” said Prof Nadeemul Haq.

He said that increasing financial inclusion was critical for strengthening financial institutions, allocating capital efficiently, enhancing access to credit and managing risk effectively. He added that lack of access to financial facilities contributed to the growth of the informal economy, which negatively impacted tax revenue collection and productivity. “The present government needs to focus on a new economic model based on structural reforms and improving the investment climate and financial inclusion for achieving inclusive and sustainable economic growth,” he said.

Jehan Ara, the founder and chief executive of Katalyst Labs, told WealthPK that the economy of Pakistan was in the spotlight currently to find ways to grow and energise it. She said that the national economy could not be strengthened by focusing on a single sector alone. “There is no magic bullet. However, if we focus on some of the main things that are needed for a positive push, the role of digitalisation and technology would come into play,” she said.

Jehan Aar said that investing in technology and upskilling people were important for socio-economic development. “With an increase in the number of mobile phones, and the National Database and Registration Authority being in possession of a database of almost all citizens in the country, there is a large number of government services that can be provided to people to improve the economy,” she told WealthPK.

Credit: Independent News Pakistan-WealthPk