The per capita income has virtually not increased while double-digit inflation continues to persist in the country for the last four years, reveals Pakistan Economic Growth Framework being presented to the National Economic Council on Saturday, May 28, for consideration and approval.
Pakistan is faced with serious challenges including macroeconomic stabilisation efforts arising from unsustainable fiscal policies, pressures of demography, a large and loss-making public sector, low and declining productivity and masses expectations from democratic government to provide them a better life. According to the Planning Commission this could only be addressed by treading a path of high growth and strengthening linkages between the Planning Commission and government performance.
The Planning Commission identified five critical changes that needs to be introduced to strengthen its linkage with the government; (i) strengthen the Medium Term Development Framework (MTDF) and the Medium Term Expenditure Framework (MTEF)) for setting medium-term priorities in line with growth strategy and reforms agenda; (ii) support a unified results-based budget preparation process; (iii) decentralise responsibility for projects to line ministries (iv) redefine the Planning Commission''s role and processes in respect of major capital projects; (v) and establish a results-based monitoring and evaluation system.
The new vision for economic growth would require periodic identification of emerging constraints to economic growth through research and dialogue with all sectors and stakeholders. The consensus building through extensive consultations on the reforms and programmes would be required for alleviating these constraints as well as building a system for measuring productivity and public service delivery and developing and monitoring quantifiable plans regularly.
According to the Planning Commission around 68 percent of Pakistan''s population is regarded as youth (under 30 years) of whom many of them are now coming into the labour force, increasing the workforce size by over 3 percent annually. To absorb the youth bulge, Pakistan''s real GDP needs to grow at an annual average rate in excess of 7 percent.
There is a need that efforts should be made to revive the economy to its short-term potential GDP growth rate of about 5-6 percent a year by resolving issues regarding energy, governance and moving towards credible macroeconomic stability, which could be achieved in a short time. The Planning Commission in the growth strategy suggests reforms - in public sector management, developing competitive markets, urban management and connecting people and places - as a way forward for accelerating growth to above 7 percent