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‘Everybody is an economist in Pakistan without a degree’

SAMAA | - Posted: Feb 3, 2020 | Last Updated: 4 weeks ago
Posted: Feb 3, 2020 | Last Updated: 4 weeks ago
‘Everybody is an economist in Pakistan without a degree’

Qaiser Bengali, Dr Shamshad Akhtar, Salim Raza, Ehsan Iqbal and Khurram Schehzad at the Adab Fest 2020 on Sunday, Feb 1 at the Arts Council in Karachi. Photo: Rahim Sanjwani/SAMAA Digital

Government officials say that stabilisation has set the stage for foreign investment to pour into our country, but economists understand we have no economic growth, said former State Bank of Pakistan governor Dr Shamshad Akhtar

“The said stabilisation in our economy is merely stabilisation in the transition of our economic trajectory,” she said, explaining that “this stabilisation is very vulnerable and anything could happen”.

Akhtar was part of a panel on the state of the economy in Pakistan: putting out the fire at the Adab Festival on Sunday. She begun her argument by saying “everybody is an economist in Pakistan without a degree”.

The panel also included economist Kaiser Bengali, investment banker Khurram Schehzad, and Pakistan Business Council CEO Ehsan Malik.

Salim Raza, another former central bank governor, moderated the discussion and set the context for the conversation on the economy, which the panelists concluded is indeed on fire.

Bengali said diagnostics are no longer the country’s focus as its problems are well-known. “Let’s now talk about putting out the fire that we all agree has engulfed us,” he said. He added that Pakistan is very rich in terms of its natural resources and claimed that 100% literacy and single-digit unemployment is not only conceivable but also “achievable within our lifetimes”.

Turning to policy structure, he blamed foreign influence for Pakistan’s economic deterioration. “We should dig a six-foot deep hole and bury the neoliberal ideology,” he said, adding that it was time the country started taking its affairs into its own hands outright rejected Washington’s agenda.

“Let’s give our policymakers a taste of nationalism,” he said. He also recommended a major cut of over Rs1 trillion in non-development expenditure, including non-combat military spending. “Nobody can be a holy cow now,” he said, adding that the country should open up healthy debates to overhaul the failed economic system.

Malik added to this and said industry and agriculture are going down the hill. “We export our raw material to China and then, after adding value to it, the latter captures our foreign markets.”

He said the ratio of the raw material cost to post value-addition profitability of these products is conservatively well over 1:20. “Why can’t we do the value addition ourselves to revive our industry and generate a great deal of jobs?” he asked.

He gave the example of the country’s footwear industry, which took a hit because it imports all of its raw material and pay duties on it, which costs us more than importing a final footwear product. “But there’s hope in this regard since the incumbent government is considering relaxing duties,” he said, adding that it will help revive the shoe industry.

“Our economy is a donkey that can’t pull this weight anymore,” said Malik. Schehzad described the economic policies in a similar way, calling non-development expenditure a big fat body that our legs–economic growth– cannot no longer bear the weight of.

Schehzad said the government, with its focus on taxing the corporations and using a punitive approach rather than incentivizing it, totally ignores how to build a system that can grow tax amount.

The session ended on a unanimous note that with hot money pouring in, inflation rising to 14.2% and growth rate slumping below 2%, the system needs to seriously consider putting out this fire immediately.

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One Comment

  1. Avatar
      Muhammad Sabir  February 3, 2020 5:09 pm/ Reply

    Since Pakistan came into existence and since I came into adulthood I never seen Pakistan’s economy rising up or healthy stability in it. In 1965 in the war period with India found stability in consumer goods and not found shortage of any consumer goods in both the provinces of Pakistan East & West. The gold was Rs.90/-per tola and $ were Rs.4/- ( 500 US $ a traveler can get much enough to get any visa for foreign tour.) and the Diesel were Rs.2.5 or little much less per gallons( i.e. approximately 4.5 liters and Petrol were Rs.4 little more above per gallon.) And Government servant class IV employees get Rs. 80/-per month and private sector it is very Rs.60 /- to Rs.100/-per month salary. This atmosphere of prices & Purchase power were remained till 1971 war. After the 1965 war Z.A, Bhutto established his own party named (PPP) and in 1973 the Pakistan get a Constitution formed by the (PPP) with the help of opposition of that time and later on the Pakistan currency devaluation is started and the Pakistani Rs.4 to decline to Rs.11/-. Since that time the Fall of Pakistani Re is continued till today. Which is now the value of Pak Rs.155/-against US $.The question is why? The Bangladesh since came into existence its currency were Double of Pak Rs. Now Bangladesh Takka is too strong than Pakistani Re. Why because they have unity in politician regarding Country’s growth stability etc. But We have no good politician to built Pakistan better than past. Every Pakistani have wish to bite Pakistan as they get opportunity. You all economist knows better than me that what is the reason of progress graph is day by day is going reversal side and non of us thinking about the positive growth, just thinking increase the own assets by hook & crook method. Even Gov: servants of key post they are also swelling the Pakistan wealth. There are several thousand even more they have made their assets by the way of looting Pakistan. The South korea and some other country get the benefits from Dr.Mehbool-ul-Haq and now they too ahead from Pakistan.

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