This whole writeup makes a lot of sense to me......I think people should read this:
Pakistan is going through one of its worst economic crises. Although the government has been trying to stabilise the economy to avoid a meltdown, the situation on the ground continues to be very fragile and vulnerable. The poor and low income families face intolerable cost of living and high unemployment, while the private sector Pakistans engine of growth seems to have lost its luster and vibrancy.
The political leaders (and the media) are exhibiting a Nero-like behaviour, bombarding the public with an overdose of constitutional amendments and conspiracy politics instead of giving greater priority to the real issues. A sound constitution is important, no doubt, however, it will not put food on poor peoples table. A stable political system and drastic improvements in the security situation are the sine qua non for the country to move ahead. The political leadership and the media need to devote more of their energy and attention to accelerate growth necessary to create employment opportunities for the tens of millions of poor and unemployed.
Few countries have shown the kind of resilience and bouncing back that Pakistan has displayed. In its 60 years history, Pakistan has had a decent growth rate that could be the envy of most developing countries, despite several catastrophic events the breaking up of the country, several wars, nationalisation, major shocks to the civil services and higher judiciary every time there was a military takeover or transition to civil rule, to name a few. Clearly, Pakistans private sector has shown the ability to overcome adversities.
This article suggests several actions that the government could take to overcome the current economic despair and malaise to put the country on the right track.
Firstly, Pakistan needs a world-class team for managing key economic ministries finance, planning and commerce. One clear driver of Pakistans boom years in the 1960s, 1980s and 2000s, of the shining India in the last decade, and of many East-Asian economies, has been the outstanding quality of the economic managers and their team majority of whom were highly trained economists with international experience. Collectively and individually these economic teams embodied the five Cs clean, competent, courageous, credible and continuity which are the necessary traits for all successful, high-performing teams. All the Pakistani economic teams, during the boom years, led by Shoaib (1960s), GIK (1980s) and Shaukat Aziz (2000s), met the five Cs criteria. India has had an economic team comprising Manmohan and his boys for over a decade.
It is absolutely critical that the economic ministers and their teams have: (i) high integrity standards so that they dont use economic policy to benefit themselves and can also block policy capture by corrupt vested interests (ii) strong professional competence (iii) domestic and international credibility, and (iv) conviction and the courage to say no to bad ideas. Having an economic team with the credentials of 5Cs in place for a long period has done wonders for many countries, and can certainly do wonders for Pakistan, too.
Secondly, the prime minister must set aside at least half of his time to personally lead reforms in the following areas which are critical to accelerating pro-poor growth exports, fiscal reforms, water, energy, poverty reduction, and public administration. He should establish, and head separate cabinet committees to oversee formulation and implementation of reforms in each of the above areas. The reforms should be developed after a thorough discussion in national and provincial assemblies (perhaps each issue could be granted a special session). Extensive dissemination of the reforms in the media and the public by the prime minister and his cabinet should be ensured, for public dissemination is the outreach strategy pursued by President Obama while promoting his healthcare reforms. These committees should meet at least once a quarter, and include provincial CMs and officials, since any meaningful reforms can only take place with the full involvement of the provincial governments. The work of these committees and the personal involvement of the prime minister would give a sense of direction and hope to the citizens, private sector and government institutions.
Pakistan urgently needs an out of the box strategy to accelerate the export growth. For a country which is so dependent on imported energy and food, Pakistan will always face foreign exchange crisis every few years unless the export-import gap is narrowed. Pakistans excessive reliance on foreign loans and donor aid has mostly resulted from the need to finance the high current account deficits. During the last decade, Indias export has almost doubled to 23 per cent of the GDP (2009), while that of Pakistans has stagnated at around 14 per cent. Consequently, India has managed to achieve stable exchange-rates and low levels of current account deficits in recent years as compared to Pakistan. As global experience suggests, (i) exports have been a major driver of growth for the majority of high-growth developing countries, and (ii) export-led growth generates far greater levels of employment as compared to an inward looking strategy. The proposed committee would oversee formulation and implementation of the export strategy. Keeping in view the example of Korea in the 1970s and 80s, this committee should meet at least once a month.
Sustaining high-growth will require fiscal reforms to: lower fiscal deficits and public debt, increase government revenues, reduce state owned enterprises losses and wasteful expenditures, and increase resources for pro-poor public services and infrastructure. Lower deficits will reduce future public debt, lower interest rates and increase the availability of credit to the private sector. The proposed fiscal reforms committee would oversee these reforms, which should be discussed in the national and provincial assemblies since increasing tax and non-tax revenues and reducing wasteful spending can only take place with the combined efforts of both federal and provincial legislatures and governments. In addition, the prime minister could set the tone at the top by voluntarily paying taxes on his agricultural income. Once leaders pay their share of taxes, the FBR would be on much stronger grounds to go after ordinary citizens and businessmen evading taxes.
Pakistan urgently needs a comprehensive water strategy to feed the burgeoning population and to avoid internal water conflicts. The proposed cabinet committee on water would oversee implementation of the strategy which would need to be debated in the national and provincial assemblies to reach a national consensus on this divisive issue. The lack of concern shown by our leaders on this important issue has resulted in our water reservoirs running dry. Pakistan can no longer afford inaction. Building large multi-purpose dams and aggressive water conservation would be the key elements of the water sector strategy.
An energy committee is proposed to ensure that this area is given the necessary cabinet-level attention, so that Pakistan always has adequate availability of affordable energy needed for growth and poverty reduction.
Given the high levels of poverty and unemployment, it is critical to ensure effective implementation of safety net programmes and those related to meeting the Millennium Development Goals (MDGs) for health and education. Overseeing these efforts would be the responsibility of the committee on poverty reduction.
No government can govern and improve the welfare of its citizens if public institutions are not functioning effectively. Up until 1960s, Pakistans public institutions were a role-model for other developing countries. They are now dysfunctional as a result of several catastrophic shocks they suffered in the 1960s, 1970s and every time there was a transition in government. The proposed cabinet committee on public administration would oversee reforms to re-build public institutions.
Revival of the economy is critical for Pakistans future, but there is no magic-pill that can do wonders for it. Moving from bust to boom will require the prime minister to lead from the front foot, personally overseeing implementation of reforms in the key areas, with the support of a sound economic team and cabinet committees.
From bust to boom
