Speakers for deregulation of various sectors for higher economic growth

ISLAMABAD: Speakers at a conference have called for deregulation of various sectors of the economy, saying that regulations had resulted in hindering economic growth. Debating on economic challenges faced by the country on the final day of the conference titled “EconFest” organized by Pakistan Institute of Development Economics (PIDE), here on Sunday, experts while citing sludge audit reports of PIDE that identify excessive regulations as barriers to GDP growth, they said that urgent deregulation was must for fostering economic growth.

They highlighted how Pakistan’s 122 federal regulatory authorities impose unnecessary licences, excessive tax burdens, and redundant requirements that stifle business operations and deter investment. The speakers called for the removal of these impediments, advocating for modernized regulations that facilitate rather than hinder business activities, thereby enhancing economic productivity and fostering investor confidence.

At EconFest 2024, another panel noted that the original vision for Islamabad as a “Garden City” has faded, with a notable decline in gardens and public spaces. They stressed that urban regeneration is crucial for all Pakistani cities and must adhere to proper rules and regulations, which should be publicized. The panel also emphasized that political will is essential for successful urban regeneration, as politicians play a key role in city development. Additionally, they pointed out that unlike many foreign cities, Pakistani cities lack efficient public transport systems, which are vital for urban regeneration.

At EconFest 2024, experts discussed the future of Pakistan’s bureaucracy, focusing on making it more efficient and affordable. Hamza Haroon emphasized reducing bureaucratic roles in city governance, aligning incentives with economic performance, and fostering competition within civil services.

Namra Awais highlighted the colonial roots of the current system and advocated for downsizing and modernizing the bureaucracy to better suit Pakistan’s complex society. She pointed out inefficiencies in the hiring and skills of Grade 1-16 officers and the lack of job descriptions for Grade 17-22 officers. Rana Muhammad addressed pension system leakages and stressed the need for aligning job responsibilities with perks. The speakers agreed on the necessity of monetizing non-monetary benefits but noted that salaries must first be competitive.

Mukarram Ansari, highlighted that while regulatory authorities worldwide are meant to facilitate businesses, in Pakistan, they often create obstacles through unnecessary licenses and excessive tax burdens, stunting business growth. He pointed out that resistance to reforms, such as those attempted by the Federal Board of Revenue (FBR), exacerbates the issue. Ansari stressed that deregulation does not mean eliminating all regulations but rather removing unnecessary ones that hinder business operations, citing India’s “End of License Raj” as a successful example. He shared an instance where an oil importer in Pakistan must obtain permissions from two authorities for the same laboratory test, illustrating redundant regulatory requirements.

Ahmad Waqar Qasim, the second speaker, explained that Pakistan’s regulatory burden, termed RLCOs (registrations, licensing, certifications, and other obstacles) by PIDE, significantly hampers GDP growth.

He noted that the cost of regulation in Pakistan is disproportionately high in an environment with a 65% government footprint. Qasim emphasized that local perspectives are often overlooked in favor of foreign aid directives, and academic involvement in deregulation debates is lacking. He argued that regulations should be based on established rules rather than ad-hoc hurdles, as seen in other market economies. The lack of a regulatory impact assessment and outdated regulatory frameworks, like the 1890 Company Act, further impede economic progress. The session concluded with a call for modernizing regulations to facilitate business operations and enhance economic growth.

The session “Revisiting Government Jobs” focused on the cost of living for government servants and the justification for new employee expenses.

Moin ul Haque highlighted the repeated failures of civil service reforms in Pakistan, emphasizing that successful reforms should identify weaknesses and promote good governance.

He contrasted Pakistan’s system with merit-based civil services in foreign countries, which ensure competence and accountability. Nargis Sethi stressed the need to reevaluate government jobs, suggesting that technological advancements should lead to fewer government positions. She pointed out that the public sector struggles with accountability as the population grows, making it crucial to promote the private sector and discourage over-reliance on government jobs.

Moin ul Haque dispelled the misconception that the foreign office is overly involved abroad, explaining that 70% of its employees are engaged in essential tasks such as economics and policy formation. He advocated for merit-based, centralized systems in education and accountability, with fixed tenures for positions. Nargis Sethi also noted the significant challenge of implementing identified reforms. The session concluded with concerns about political promises to increase government jobs, questioning how to balance this with the need to reduce such positions to ensure a leaner, more effective public sector.

During a compelling session at EconFest 2024, experts discussed the challenges of media and image building, specifically focusing on the limited coverage of business reports. Faseeh pointed out that within the five segments per hour typically allocated in news programming, business reports rarely receive any attention. He emphasized that media outlets lack the incentive to create business-related content due to its traditionally low viewership.

Mehtab, addressing the issue from a journalist’s perspective, acknowledged the difficulty in creating content that captures public interest. He argued that while business content is crucial, politics also plays a vital role in people’s lives and naturally garners more attention. According to Mehtab, politics should be discussed extensively because it directly impacts people’s lives and aligns with what the audience wants to hear.

The session underscored the need for innovative approaches to engage the public with business content, balancing it with political discourse to ensure comprehensive news coverage.

PIDE’s EconFest continues to be a pivotal event in celebrating and promoting innovative ideas and independent thinking in the realm of economics and policy.

In the 3rd Economy Festival, various organizations collaborated with PIDE including The Bank of Punjab, Atlas Honda, LUMS, National Defense University, Pir Mehr Ali Shah ARID Agriculture University, Rawalpindi Women University, The Urban Unit, Chaudhry Nazar Muhammad Department of Economics, National University of Modern Languages, SECP, IM Sciences, Riphah International University, SZABIST, The Millennium Universal College, Oxford University Press, Books, Paramount Books, and Metropolitan Corporation Islamabad.

Copyright Business Recorder, 2024