The Planning Commission has started consultations with the stakeholders on three-year Economic Growth and Equity Strategy (EGES) and the National Annual Plan 2020-2021, with the clear message that only approved project will be include in the PSDP 2020-2021, well-informed sources told Business Recorder.
This was the crux of a recent meeting held in the Planning Commission, under the chairmanship of the Deputy Chairman Planning Commission, Jahanzeb Khan which was also attended by the vice chancellor PIDE.
The purpose of the meeting was aimed at getting suggestions from stakeholders to turn around productivity and investment, which are consistently on the decline. Addressing the participants, Deputy Chairman Planning Commission, stated that the formulation of Annual Plan 2020-21 is of more significance as the economy is in stabilization phase at this juncture.
He emphasised that the federal secretaries should have attended the meeting for ownership of the three-year EGES and National Annual Plan 2020-2021. He said that in wake of various challenges to the economy, all the provinces and government institutes needed to come-up with synchronized/harmonized measures for the EGES and the National Annual Plan 2020-2021. He informed that as a policy initiative, only approved projects would be considered for 2020-2021.
In this regard, concerned efforts from all the ministries/provinces are required to prepare the PC-1s/project documents in line with the EGES within next three months. The deputy chairman Planning Commission asserted that policy formulation is a neglected area, which needs to be focused along with development projects.
He stated that prevailing sectoral policies needed to be updated and harmonized. For instance, trade policy needs to be harmonized with the industrial policy and vice-versa. Similarly, agriculture policy needs to be synched with the water policy.
Briefly analyzing the current economic situation, the deputy chairman Planning Commission informed that productivity was consistently on the declining trend and needed to be dealt with urgently as well as effectively. Similarly, rate of investment is decreasing as compared to the regional countries.
Growth-led investment is a missing link, which needs to be looked into. An effective regulatory framework and deregulation measures may be taken to facilitate/attract private sector so that a reasonable target of economic growth may be set and achieved.
Existing regulatory framework of the institutions may be reviewed and swift remedial actions may be taken to remove any bottlenecks/impediments for investment. Secretary Planning, Development and Special Initiative (PD&SI) pointed out that the provinces should play an active role in drafting a coherent EGES.
Similarly, the private sector may also be taken in loop for this rolling EGES. He asserted that the ministries/provinces after consulting the private sector may devise such regulatory framework, which facilitates the flourishing of private sector to attain the goals of growth. The vice chancellor PIDE shared the main contours of the EGES through a presentation.
He stated that Harvard Advisory Group and Dr Mahboobul Haq created a model of economic development through establishing infrastructure (through development projects) on borrowed money. This approach worked well but now it needs to be changed.
He pointed out that Pakistan's private investment was only 10-11 per cent of the GDP as compared to India's (30 per cent) and China's (40 per cent), which needed to be picked up. He further stated that unemployment rate was very high for which research studies suggested that a consistent growth rate of eight percent per annum was required for at least 30 years to effectively utilize the labour force. He pointed out that there were massive employment opportunities and emerging demand in areas such as, hotelling, tourism, housing, IT, and other services sectors.
He asserted that the investment from the private sector especially in the housing sector was required. He further noted that there was non-conducive environment to develop street vending, which required proper laws and regulation to flourish the industry.
He stated that commercial use of already established assets such as universities, railway stations, airports etc should be encouraged to boost economic activities. He further stated that ill-planned/brick and motor PSDP projects may be discouraged and restrained.
The JCE(EP), while sharing the implementation strategy of the EGES, stated that Bangladesh and India used bottom-up approach to evolve their development strategies. During discussion, Chief Economist, P&D Board, Sindh stated that a top-down approach may be used for setting-up growth targets.
He said that the structure of the economy was not determined (i.e. input-output model has not been updated), the TVET sector is not aligned with the productivity, competitiveness and exports for attaining desired growth. He urged to establish a forum to analyse the current situation and come up with workable and result-oriented deregulation measures.
The ACS (Development), Government of AJ&K stated that there should be a clear line of action from the Planning Commission for conducting business in special areas especially after 18th amendment for implementation of vertical health programmes.
The representative from the Government of Punjab that there exists a provincial growth strategy and the SDG goals are kept in mind, while conceiving the development projects.
Secretary, Ministry of Railways informed that the PSDP projects of the Ministry were being aligned with the recently enacted National Transport Policy, 2018. However, he was of the opinion that diversified investment portfolio is equally important.
After detailed deliberation and discussions, the meeting decided that all the stakeholders should share their perspectives/ideas/broader areas of interventions by the mid of the current month with respect to their strategies on how to spur growth in 2020-2021.
It was also advised that areas may be identified for deploying efficiency gains, sector-wise ways to reduce involvement of government footprint by readily involving the private sector, and how to tap agriculture growth potential through synchronized policy measures in different sectors.
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