Urgent steps needed to avoid default: experts

ISLAMABAD - The newly elected government should focus on economic recovery, improving governance, water scarcity issues, debt reform strategy, judicial and taxation reforms in its first 100 days in power, suggested by Policy Research Institute of Market Economy (PRIME) - an independent think tank.

After a wide-ranging discussion with various stakeholders including academics, civil society, business leaders, policymakers and economists, the Prime is of the view that the new government should focus on the following 12 key areas in its first 100 days in power:

Economic recovery and growth: Pakistan's external sector is facing a crisis situation. Urgent steps are needed to save the country from default. This would require achieving double digit growth of exports and facilitating overseas remittances. Government should set up a five-member team consisting of the ministers for finance and commerce and three experts from the private sector to draw up short and medium term proposals to deal with declining foreign exchange reserves and boosting exports.

Improving governance: Governance at the government level as well government-run corporations has seriously deteriorated. A framework should be announced within a month outlining a plan to improve the current situation. Work in the government offices should be moved from the manual systems to automation and the layers of hierarchy should be decreased to make decision-making more efficient. For corporations, their policy-making boards should be strengthened and made independent of government control.

Poverty alleviation: We need an inclusive growth. Due to imbalanced government policies, inequality has increased with the poor getting poorer while the rent seekers are becoming richer through special preferential treatment. Also not enough attention is given to the rural areas. This is resulting in mass migration towards the cities. Government should put in place a programme that can lift at least 5-7 million people out of poverty each year. Special attention should also be given to sectors that can create employment and improve the economic wellbeing of the more deprived people.

Economic Diplomacy: Pakistan must announce a new foreign policy aligning with its economic interests leading to open trade, which will ensure, inter alia, regional peace, security and harmony.

Social Indicators: Pakistan has one of the worst social indicators in terms of primary health and education. The new government should make extraordinary efforts to meet UN's Sustainable Development Goals including ending all forms of hunger and malnutrition by 2030. Stunting seriously affects brain development. It also impairs physical and mental abilities. Eradicating stunting and ensuring 100 percent enrolment for children should be one of the top priorities for the new government.

Water scarcity Issues: Pakistan is becoming a water stressed country. There is only enough water storage for 30 days compared to our neighbours who have many times more storage capacity. Currently we can save 13.7 million-acre feet out of 145 million acre feet received. Pakistan needs more water storage dams. Therefore one of the top priorities for the new government should be to expedite construction of new water storage dams, which would also help us with our energy shortages.

Debt Reform Strategy: Pakistan must announce a new debt reform strategy to manage its external and domestic debt, as its repayment consumes almost one-third of federal expenditures.

Anti-corruption and Improving Accountability: Corruption has to be eliminated completely. The current accountability, investigation and prosecution system takes a long time. Also sometime it harasses innocent persons. It also discourages decision-making. The accountability system should be improved to make it more effective but less intrusive.

Reducing bottlenecks: Pakistan ranks rather low on the international indices for the Ease of Doing Business. All regulatory regimes should be reviewed to simplify them and remove any duplication. All Ministries and Departments should be asked to set-up singe-windows where all enquiries can be responded. It should be made sure that all enquiries are responded to within a week. In more complicated cases, the issue must be escalated to the senior management and in any case, a decision must be taken within a month.

Taxation reforms: The current tax policy is anti-poor, anti-growth and anti-exports. It relies heavily on withholding and taxes on international trade. There is a need to reverse this policy, reduce the number of taxes and make the tax policy more just and transparent.

An expert panel should draw up a reform plan outlining the new direction. This would also restructure the Federal Board of Revenue to make it more independent and reliant on information technology.

Enhancing Competitiveness: Our main reason for falling behind is lack of competitiveness. There is a need to improve skill level of our workers and educational standards. All other factors which are impeding our competitiveness should be identified and efforts made to address them. The Minister for Planning and Development should be tasked to conduct this exercise and report to the Cabinet within two weeks.

Judicial reforms: There are long delays in delivering of justice. This seriously hurts common man and impedes investment in the country. A programme should be set in place to reform the current system and ensure that pending cases are decided within a given timeframe. Any shortages of personal or other problems should be addressed on priority.

 

 

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