ISLAMABAD: The Pakistan Institute of Development Economic (PIDE) to absorb a high level of debt and youth bulge in Pakistan has suggested sustained economic growth of 7 to 9 percent per annum for 3 decades.
Talking to a group of journalists here the Vice-Chancellor (VC) PIDE, Dr Nadeem ul Haque and Pro-Vice-Chancellor, PIDE Dr Durre Nayab said that challenge is to significantly raise investment rate and productivity which are major drivers of growth but at present both the indicators are relatively low and continually declining. The greater the role of the government in the economy, the lesser is the space available for the entrepreneurs to function. The Investment Climate in Pakistan is very pragmatic, needs various corrective measures like decreasing the government’s footprint in the economy.
Referring to the detailed study report titled “Reform Agenda for Accelerated and Sustained Growth” prepared by the PIDE Reform Agenda Commission comprising renowned economists and technocrats, they said that our research lays down the reform agenda, pursuing which would put the country on a high and sustained growth trajectory. It focuses upon reforming almost every area that directly or indirectly influences economic growth. This includes beginning with, reforming the functioning of the state itself.
Towards a stable democracy, they suggested the adoption of a proportional representation electoral system. For the political parties to be eligible to contest elections, the parties must have elections within the party. A certain, minimal percentage of the provincial population must be inducted as party members. The legislators should not have any say in the approval and execution of development projects. Only a small proportion, maybe 5 percent, of the legislators may hold executive positions, the rest should be legislators only. There should be a maximum term limit (maybe two terms) for the Prime Minister and all the legislators.
Additionally, the Public Sector Development Programme (PSDP) funds should be decentralized, federal and provincial governments should focus only on policy formulation, monitoring, and evaluation. The task of regulation may be left to independent regulatory agencies staffed with professionals. Service delivery requires closeness to stakeholders, and therefore, services are best delivered by local governments.
The decentralization of power on the grassroots level and making people authoritative is very crucial to promote democracy and build the state’s capacity for governance. And for that PIDE in its Reform agenda suggests making local governments’ operational, direct election of mayors, clearly defining the role of all three tiers of local government, PIDE officials added.
Dr Haque further said that PIDE’s comprehensive study recognizes investment and entrepreneurial activity cannot happen in markets without the government’s enabling and facilitative role. There is a need to emphasize reorienting the role of the government to function as an ‘enabler’ in the economy.
Dr Nayab added that cities are believed to be the engine of economic growth. The cities that encourage economic activity are dense, high-rise, mixed-use, and inclusive. These cities provide work, home, markets, school, hospital, and leisure for all close to each other. By clustering economic activities, these cities generate knowledge spillovers, on the one hand, and reduce transaction costs on the other. This is an environment conducive to innovation, which is crucial for economic growth.
“The current regulatory framework does not allow the emergence of such cities. The PIDE’s reform agenda recommends rethinking the regulatory environment surrounding city zoning, construction regulations, car use, public spaces, among other things, to unleash such cities that facilitate economic activity to their fullest” she added.
PIDE’s Vice-Chancellor stressed the need to develop state capacity to understand and meet the emerging challenges which require embedding research in all activities, just like the country’s leading the scientific and technological advances. This would also require disrupting the education system to foster problem-solving skills and creativity. To begin with, this calls for almost universal internet access, and the PIDE recommends spending state resources to make the internet available for all at affordable prices. We believe that the payoffs from this would be more than the typical brick-and-mortar projects that the PSDP Funds.
Copyright Business Recorder, 2021
Comments
Comments are closed.