Significance of Planning Commission

Federal Minister for Finance and Revenue Shaukat Tarin, after four months in office, announced, in the presence of eight cabinet ministers and members of the Economic Advisory Council, the blueprint of the country’s ‘Economic Policy’.

With the commitment not to exit the International Monetary Fund (IMF) programme, the Finance Minister unveiled another short-, medium- and long-term economic programme for 14 key sectors to ensure sustainable growth. The key objectives of the plan include accelerating the overall economic growth rate from 3pc to 6pc, increasing tax to GDP ratio from 1.5pc to 2pc annually, attaining a target of $30 billion exports by FY 2023-24, maintaining the momentum in foreign remittances and generating employment opportunities over the period of time to engage the youth in productive sectors of the economy.

The focus of the plan is to accelerate growth in agriculture and small farms, micro enterprises, small and medium enterprises, construction, tourism and information technology. Tarin said performance in 14 sectors would be monitored from September and the prime minister would be given a briefing about the execution of the plans every month. “Hence plans do not focus only on devising strategies but also on ensuring implementation which is a major break with the past practice,” according to him. He said obviously the incumbent government would be able to implement only short-term actions, some of which had already been included in the current year’s budget, but it would set the stage for coming governments to follow.

The economic policy unfolded is more of a ‘ short-term commitment statement’ to validate the incumbent government’s ambitions to steer the country’s economy for the better in the remaining two years of its tenure, enabling it to enter the election in 2023 with better numbers. It is unlikely that the medium- and long-term economic plan left out for the next government will be adopted - if it is not a PTI government.

Gone are the days when the country’s much admired ‘Five-Year Plan’ was considered a sacred document to steer the country’s economy because it was devoid of politics and based on merit and national interest. Tarin, admitting this reality, said: “Pakistan’s planning-based economic policy had come to an end two decades ago, resulting in repeated boom-and-bust cycles”.

The last two governments’ economic policies were driven by ad hocism, vote politics and vested interests. Influx of imported oil and coal-based power plants, including rental ones, is one sad example of it which has messed up, beyond repair, the country’s energy sector - the backbone of any economy. The Tenth and Eleventh Five-Year plans during the said period missed most of the targets and failed to transform the economy into a vibrant and resilient one.

Under the nation’s current ‘Twelfth Five-Year Plan’ from 2018 to 2023, the government has envisaged average GDP growth rate of 5 percent, increase in exports from $24.8 billion to $34 billion, reduction in imports to $65 billion and creation of 10 million jobs during the tenure of PTI-led regime. The Five Year Plan foresees stabilisation under the IMF programme in reducing imbalances on the domestic and external front.

The country’s Five-Year plans have an interesting history. The then prime minister Liaquat Ali Khan presented the first Five-Year Plan before the parliament of Pakistan on 8 July 1948. It was oriented around trickle-down economics. As part of this programme, the State Bank of Pakistan was established to kick-start banking services in the country. The major economic infrastructure was quickly expanded and the hiring gap was filled as government revenue began to rise.

The most successful was the Second Five-Year Plan (1960-65), which was conceived and implemented during the rule of President Ayub Khan. This plan accorded highest priority to heavy industrial development, and advancement in literature and science, and had a single underlying purpose: “to advance the country as far as possible, within the next five years, along the road of these long-range objectives.” Improvements were made in railways, communications and transportation. More attention was given to private sector industrial development and agricultural industries; the second Five-Year Plan was aimed at increasing the national income by 20pc. Unemployment was tackled through industrialisation and overall major industrial development was carried out in Pakistan.

The second Five-Year Plan surpassed its major goals when all sectors showed substantial growth that also encouraged private entrepreneurs to participate in activities in which a great deal of profit could be made, while the government acted in those sectors of the economy where private business was reluctant to operate.

This mix of private enterprise and social responsibility was hailed as a model that other developing countries could follow.

The Planning Commission has the distinction of being headed by some of the distinguished economists and bureaucrats of the country such as Said Hasan, Prof Khurshid Ahmad, Dr Mahbubul Haq, V. A. Jafary, AGN Kazi, Dr Hafiz Pasha and Dr Nadeem-ul-Haq. It is about time the PTI government in its remaining period of the five-year tenure restored the stature of the Planning Commission and ensured that the policies worked out in the Five-Year Plan are conceived on merit in the greater national interest. This alone should be the document to be followed in letter and spirit.

(The writer is a former President, Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2021