Pakistan’s economy surviving on ventilator, says Dr Kaiser Bengali

Due to a lack of implementation of policies in letter and spirit, which alone can improve the prevalent situation of Pakistan, the country’s economic situation has not been good at all and has been surviving on a ventilator, said economist Dr Kaiser Bengali on Wednesday.

Dr Bengali was the guest of honour at the Young Economists Conference 2020 held at the University of Karachi’s Department of Economics. The department’s faculty and students had arranged the conference on the theme of ‘Sustainable Growth and Economic Development in Pakistan’ at the Arts Auditorium.

The economist rejected the official figures, saying that they are not at all long-lasting. He stressed that the claims being made by the government are not factual.

He mentioned that Pakistan has gone to the International Monetary Fund 23 times for a bailout, warning that if the government did not make drastic changes in its policies, the country will have to go for another bailout in the future.

He said the past and present governments have focused only on increasing tax collection without realising the fact that they first need to reduce expenditures, establish new industries and create new sources to generate income.

He lamented that no government to date has adopted policies that can provide relief to the masses. Their policies are always meant to entertain and to provide more luxuries to the elites of the country, he said.

“New loans are taken out to repay old loans. No policy is in place that can bear fruitful results and bring betterment to the country. There has been no change in the mindset of the successive governments.”

Dr Bengali said governments do not reduce their expenditures but always sacrifice development projects and the funds allocated for them, because of which there are fewer proper facilities and infrastructure in the country, particularly in megacities like Karachi.

He said society cannot pay taxes so the entire burden has been shifted to the shoulders of the people who are associated with different services. He recommended that the government immediately ban non-essential items in the country to save foreign exchange.

He lamented that on the one hand tens of thousands of people are living below the poverty line and there is nothing for them, but on the other, we can easily find pet food and shampoos in stores, which is very irritating.

The economist said international companies are making a lot of money from the local market and take it to their own countries. He recommended that Pakistan should pay attention to developing its new industries and promote its agricultural products in local and international markets.

Right direction

Earlier, State Bank Deputy Governor Dr Murtaza Syed through his presentation shared the initiatives the government has adopted to improve the current economic situation of the country.

He said everyone should try to understand the causes of our economic challenges, the policies, actions and their impact, the near-term outlook and structural issues.

Import and export are major factors for foreign exchange of any country, and the rising fiscal deficits and public debt (public debt and fiscal balance) are necessary to tackle foreign exchange reserves, he added.

He also said the exchange rate flexibility has significantly turned around the current account. He hopes that further betterment will be brought by making more global exports and helping to rebuild international reserves.

He shed light on the fact that fiscal deficit has also been turned around driven by significant growth in tax revenues. He said the monetary policy has been tightened in response to rising inflation due to depreciation, taxes and energy prices.

He admitted that the economy has been slowing down, but hoped that improvement will be seen in the coming days, claiming that the policies are running in the right direction.

Future plans

Dr Naeemuz Zafar, the Sindh government’s chief economist, discussed the provincial administration’s development projects and said the people will see the results soon. He said productivity had not improved in the past but now things were gradually getting better.

He said goals cannot be achieved without sustainable products, and the federal and all the provincial governments should work on macro and micro levels to bring positive changes in society and in the economic conditions of the country.

He also shed light on the projects being initiated by the Sindh government as well as discussed what plans would be implemented in the near future.

Call for input

KU acting vice chancellor Prof Dr Khalid Mahmood Iraqi said economy is a very serious national matter, adding that all stakeholders must provide their input and work together to produce the best results for the country and for its bright future.

He said public policy can play a very important role in this regard, and urged that continuous and consistent policies are required to address all the challenges Pakistan is facing as regards the economy. He added that socio-economic development is necessary for the future of the country, and observed that the country’s revenue should be used for socio-economic development.