Dr. Miftah Ismail, Finance Minister, and Shaukat Tarin, former Finance Minister, agreed to form a Charter of Economy among the political parties while putting aside political differences for sustainable economic growth on a long-term basis.
At “The Way Forward for Pakistan”, organized by Nutshell Conferences and Corporate Pakistan Group, on Saturday, Miftah Ismail said Prime Minister Shahbaz Sharif is ready to sign the Charter of Economy on a minimum agenda despite the different ideologies of various political parties.
He said that while economic growth is achievable in Pakistan with its huge population, sustainable economic growth has been a challenge over the last few years, which needs to be addressed by everyone in the government and the private sector. Consistency is the key to economic policy, and the present government should honor the commitments made by the previous government as part of the sovereign guarantees of the country and international laws.
Pakistan needs nearly $37 billion for the next year to repay loans to various agencies and countries, controlling the current account deficit, and building the required foreign exchange reserves, but this can only be done by signing a program with the International Monetary Fund (IMF). Going forward, the government will focus on discouraging import-led growth in the economy, whereas the manufacturing sector should be given preference to enhance exports, Miftah said.
The government will work on revolutionizing the agriculture sector, which will meet the local demand for food items. He said the government will not impose any ban on traveling, raw materials, and essential items but only on luxury and non-essential items. Also, taxes will not be increased on people’s incomes, he added.
Former Finance Minister Senator Shaukat Tarin said the Charter of Economy is very important for the country, which he proposed many years ago. Political differences should be put aside and the economic agenda should be agreed upon. The next few months are difficult, but the situation will improve after the general elections, he added.
Pakistan needs inclusive and sustainable growth for a long period of time. In this regard, the saving-to-GDP ratio and tax-to-GDP ratio should be increased with incentives and schemes in the next five to six years. The gap between exports and imports stands at 12 percent, which should be reduced to six percent and to zero in the next few years, Tarin added. The former minister suggested the central bank and the government issue new licenses to banks on the basis of regional boundaries.
Ghias Khan, President of the Overseas Investors Chamber of Commerce (OICCI), said a long-term and consistent policy is indispensable to attract businessmen and foreign investors. Pakistan should focus on its food and energy security on a priority basis. Ghias Khan added that Pakistan should also focus on technology services, which have immense potential to enhance exports and local productivity.
The country needs to enhance the production of wheat and essential crops to meet its demand and boost exports of agro-products. Furthermore, he added that the country is rich in mineral resources, which can be translated into lucrative exports. Investment should be encouraged in the productive sector instead of real estate.
Muhammad Aurangzeb, Chairman of Pakistan Business Council (PBC), said that cross-party consensus is very important in Pakistan because business needs sustainability and consistency of policy. Hence, the Charter of Economy is the need of the hour, he added.
He added that there is no dearth of solutions in the country, but we need timely decisions and execution.
We have to focus on the capacity building of our youth in every sector, which will ultimately produce results in the economy. We have to create an enabling environment for freelancers, who are growing in numbers in Pakistan.
Farrukh Khan, Management Director, Pakistan Stock Exchange (PSX), said the political challenges should be addressed first before trying to fix socio-economic issues in the country. The government is focusing on the documentation of the economy, but the aspect of taxes should be realized to stabilize it, he added.
Political stability is very important when it comes to attracting foreign investment and boosting local investment in the country, said Amjad Waheed, CEO of NBP Fund Management Limited. The privatization of the state-owned enterprises (SECs) should be prioritized as these are eating up over Rs 1 trillion of the valuable revenue every year, whereas the government’s expenditures and debt of the country should be reduced gradually, he added.
The yield of Pakistan’s agricultural land should be enhanced, which could be done through various measures including farm mechanization and supply chain management for effective gains in the agriculture sector, said Maheen Rahman, CEO of Infra Zamin. She added that we should focus on energy sufficiency, agriculture and food security, and business efficiency.
