LAHORE: Former chairman Federal Board of Revenue (FBR) Syed Shabbar Zaidi on Tuesday said that Pakistan’s agreement with the International Monetary Fund (IMF) could not be finalised unless China agrees to reschedule our debt according to wishes of the West.

He said this while talking to Business Recorder after the inaugural session of a two-day 16th International Conference on Management of Economy, organised by the Lahore School of Economics.

Zaidi said in his personal view the reason behind delay in Pakistan and IMF agreement is that America wants that China reschedules debt of Pakistan as per their wishes. “Now it is an issue between China and America,” he said.

He said that Pakistan needs structural and constitutional reforms to come out of economic crisis. He said we have to change our taxation system besides bringing changes to the NFC Award. He also suggested rolling back the 18th amendment in the Constitution.

In the session, Shabbar Zaidi discussed the oversized role of federally collected tax revenues in the total tax pool of Pakistan and the large transfers of revenues to the provinces after the 18th Amendment.

Former governor State Bank of Pakistan Dr Ishrat Hussain, expressing his views, said that our educational institutions should focus on research. He suggested that economists should play their academic role.

Rector Lahore School of Economics Dr Shahid Amjad Chaudhry while talking to Business Recorder said that Pakistan is passing through very difficult economic times. He stressed his hope that by the next year Pakistan will come out of economic crisis. He hoped that the staff level agreement with IMF will soon be finalised.

Shahid Chaudhry, in his inaugural remarks stated that the current difficult economic situation faced by Pakistan emanated in large part from the effects of Covid in 2019-20 and the Ukraine war. The Pakistan economy is now stabilising and after almost no growth in 2022-23, it is likely to grow to resume modest growth in 2023-24, he said

Dr Moazam Mahmood, Professor of Economics at the Lahore School, projected the Pakistani economy to start an upward growth trajectory in the next fiscal year. The reasons behind this, was that Current Account seems to be recovering from its deep deficits, albeit with import controls that need to be better targeted. Based on this he projected 3.61 percent economic growth over fiscal year 2024.

Dr Naved Hamid, Ali Chaudhry and Murtaza Syed discussed how monetary policy could have reduced the impact of the current economic crises and lessons, which can be drawn for monetary policy in the future.

Dr Azam Chaudhry, Pro Rector, Dean and Professor of Economics at the Lahore School of Economics talked about capital flight from Pakistan using the data from the balance of payments and the level of trade mis-invoicing in Pakistan.

Dr Azam concluded that in the last 10 years, capital flight has reached to significant levels over the last few years reaching almost 5 billion dollars. He also showed that capital flight is extremely sensitive to economic conditions which means that sustained economic growth will tempt capital to return. If the Pakistani economy can rebound quickly to a 4-5% growth rate, it is estimated that at least $5.5-6 billion of capital can flow back to Pakistan each year.

Dr Nida Jamil of the Lahore School of Economics examined the impact of China lowering tariffs on Pakistani products, allowing them greater access to the Chinese markets under the Pakistan-China Free Trade Agreement (FTA) signed in 2006.

Dr Theresa Chaudhry, Professor of Economics at the Lahore School, co-Director of the Innovation and Technology Centre and Hamna Ahmad discussed whether Pakistan can look to the service economy, specifically to the gig economy, as a source of dynamic export growth.

They used unique data from IT services offered online to foreign companies to understand the types of jobs that are being demanded, the characteristics of those offering IT services and the remuneration offered to those offering services. They also discussed the potential for IT exports and also discussed government policies to promote IT exports.

Copyright Business Recorder, 2023