By Abdul Wajid Khan

ISLAMABAD, Aug 16 (INP-WealthPK): Pakistan Institute of Development Economics (PIDE) Islamabad has unveiled its economic plan under the ‘PIDE Charter of Economy’ for future growth and development, reports WealthPK

The ‘Knowledge Brief’ of PIDE, which has been authored by its Vice Chancellor Dr. Nadeem-ul-Haque and Research Economist Saddam Hussein, presents its advocacy as a charter of economy to serve as a live document and a blueprint for future economic growth and development.

PIDE proposes that Pakistan must grow at 7-9% to settle down crucial issues through spillover as well as the ripple effect of that growth.

It said, without a doubt, Pakistan is on an economic tailspin and swiftly spiralling downwards. The country needs an instant economic roadmap to meet the current challenges.

The chaos is partly due to political instability. Politics and economics must be delinked if we are to take on the path of economic growth and development in the real sense of the word.

Hence, a charter of the economy is the need of the time across the board. Political consensus over this point is of critical importance. Implementing this charter in letter and spirit seems highly unlikely without a broad-based political consensus.

The current economic difficulties and exceedingly high inflation have sent ripples across the country, with every Pakistani concerned about the economy and where Pakistan is heading. Hence, there is a demand for an economic roadmap, i.e., charter of economy.

First and foremost pre-requisite of this charter is policy consistency for at least next 15 years. Once there is a political consensus, there should be no off-tracking from the set direction, whatever the case may be.

Under its economic plan, PIDE proposes to form only a 10-member federal cabinet to decrease expenditures.

It says the cabinet size matters; the number of top positions available affects the greater political game, with larger cabinets helping to satisfy the ambitions of more politicians. The size of the cabinet also has fiscal implications. Larger cabinets produce larger governments and this eventually impacts fiscal policy and may contribute to the deficit.

The document underlined that a police force is essential for efficient and effective crime detection, prevention, and public order maintenance, to enable a conducive environment for economic activity, Foreign Direct Investment (FDI) in particular.

Therefore, to accomplish the requirements of the rule of law, it is binding on governments and state authorities to ensure that the police is apolitical, autonomous, accountable, and professional community service.

It also proposes to establish an Independent Planning Commission (IPC) headed by a seasoned economist. The brief said an effective planning and development apparatus is essential for the economy's overall health - helping unlock productivity, employment generation, creating dynamic, liveable cities, optimal resource allocation without creating regional disparity, and so on. A robust, independent IPC would strengthen the planning system by minimizing the risk of corruption or undue political influence.

The IPC would also inherently ensure policy consistency in the long run – a must for a business-friendly ecosystem.

“It is proposed that overlapping ministries such as finance, commerce and textile, industries and production, planning and development, energy, maritime affairs and water resources should be fused with separate wings under the IPC. Such a step would robustly enhance coordination and result in synchronized planning, optimal resource allocation, and better outcomes,” it suggests.

It also recommends that the Parliament may establish a Parliamentary Budget Office, comprising experts who can provide impartial budget analysis. This should then lead to an autonomous Budget Unit, comprising top experts from across the country, who would be engaged in focused, comprehensive budgeting of the country the year round, without any political influence.

The document suggests that a result-based management framework should be adopted to boost the effectiveness of public investment. This may include investing in research and development (R&D), developing human capital, universal access to the internet, imparting technical education, and encouraging entrepreneurship.

It says there is a sense of urgency to reimagine the cities of Pakistan as engines of growth and some interventions must be made to reform the overall functioning of the cities. It underlined that universal and cheaper internet access is the need of the hour. The impact and the subsequent positive spillover effect make it an extremely urgent measure. It further proposes to introduce tax reforms.

It highlighted that bureaucracy is the backbone of a country. If the bureaucracy is dysfunctional, one can assess the overall picture very well. That is why, reforming bureaucracy – the Civil Service of Pakistan – must not be avoided at any cost.

All agencies and levels of government are to be monitored by the Human Resource Management (HRM) Ministry, which would then prepare annual reports - comparing practices, salaries, and state of public service.

The Charter proposes establishment of an autonomous debt agency that would perform all functions and operations related to debt in a technical manner, delinking it from political narratives and influence.

It said that the prime minister or chief minister should not make top appointments by hand-picking a few people of his/her liking. Every authority or department’s head should be appointed on merit, and given full authority, so that they can function independently, to implement their vision. Any head of an agency failing to meet the target below 60% twice in a row should be fired.

PIDE views economic growth at the pivot, for most of Pakistan’s ills. Thus, for sustained growth, it suggests, there must be an independent Growth Commission. The commission should comprise experts; no political appointments.

It would perform all the functions and give informed policy advice related to promoting growth, in a technical manner, delinking it from politics.

The Charter recommends a comprehensive long-term export policy, reinforced by a well-chalked-out industrial policy that brings all stakeholders together, under the IPC, without which Pakistan’s exports are unlikely to grow and diversify sustainably.

It notes that public sector enterprises’ losses cannot be allowed indefinitely.

The best option is to privatise these entities. Another option could also be the transfer of management (but not equity) of public sector enterprises to qualified experts in private sector for a prescribed period on a profit and loss improvement arrangement in the proportion of 80:20, with the dominant beneficiary being the government.

The study also proposes reforms in markets pertaining to agriculture, real estate, energy, natural gas and fuel oil to produce positive results.  

Credit: Independent News Pakistan-WealthPk