Prime Minister Shehbaz Sharif vowed on Tuesday to bring lasting economic stability into his tenure through increased agricultural productivity and exports, but said political stability was a precondition for that to happen.
At the inauguration of the Turnaround Pakistan conference, which was attended by people from all walks of life to propose original economic solutions, the Prime Minister regretted that after 75 years of independence, the country’s balance sheet had more liabilities than of assets.
Prime Minister Shehbaz went on to say that Pakistan faces innumerable problems as he calls for overcoming personal interests and differences.
“Each new government blames the previous government but now we have to decide to change the fate of the country and for that we have to work day and night,” he added.
The Prime Minister stressed the need for all circles to work together for the progress of the country as well as the need for autonomy.
“Autonomy guarantees political and economic independence.”
The Prime Minister has also promised that he will end the ‘red carpet’ and the need to seek permission to do business within a month – a goal that seems difficult.
He stressed the need for self-reliance instead of relying on the International Monetary Fund (IMF) while citing Bangladesh as an example which completed a $6 billion infrastructure project without any loans from the Washington-based lender or of the World Bank.
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He cited the example of Reko Diq, saying that Pakistan had wasted billions but had not yet gained anything from the project.
The prime minister said the country was drowning in debt.
He regretted that the 1,200 MW Haveli Bahadur Shah power plant, set up by the former PML-N government, is still not completed.
Pakistan’s economy is marred not only by declining exports, but also by recurring budget and current account deficits, as well as below-average social indicators.
In this context, it is absolutely necessary for the government to urgently take the necessary measures to increase the country’s domestic exports.
Speaking on the occasion, Planning Minister Ahsan Iqbal said Pakistan was on track to become the world’s 25th largest economy but progress stalled in 2018 after the new government changed economic policies.
He said he was ashamed of the country’s situation after 75 years of independence, but vowed to change course.
The minister stressed the need to earn money from exports. “Exports and foreign remittances are barely enough to fill the gaping trade deficit.”
The Turnaround program that Ahsan unveiled was the replication of his Vision 2025 document, launched eight years ago. However, this time the government did not call it a Vision 2025 document. The planning minister said the reason behind it was not to give a new government a reason to abandon the plan.
Various thematic groups have made recommendations to change the economic course that has led to unsustainable budget and current account deficits.
The export-led growth group stressed the need to get consensus on the economic roadmap from at least nine parties that were part of the coalition government.
It was recommended to sign well-negotiated Free Trade Agreements (FTAs) with developing countries, especially countries in Africa, Central Asia and Southeast Asia. In addition, existing FTAs need to be thoroughly revised based on Pakistan’s comparative and absolute advantages.
The government was also advised to put productivity at the heart of increasing exports. The commodity producing sector of the Pakistani economy needs to improve its productivity and efficiency as it is currently operating at its lowest level. Increasing productivity would help the economy become internationally competitive, according to the recommendation.
It has also been argued that streamlining and streamlining of regulations and development of brands have been said to be essential for the growth of Pakistani exports.
The establishment of the EXIM (Export and Import) bank to provide financing to manufacturers to expand the export base has also been proposed.
One group recommended reducing the super tax imposed on the business sector. He argued that the corporate sector was already paying multiple taxes and contributing to Pakistan’s growth.
He was also informed that instead of focusing on import substitution, there is a need to focus on increasing value-added exports. The need to increase agricultural productivity to avoid food insecurity and save foreign exchange was also highlighted.
Exports of information technology should be increased by developing skills and formalizing and channeling existing exports by encouraging the sector.
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To attract foreign direct investment, it is necessary to invest in human resource development, policy coherence over a longer period and improving the ease of doing business.
The resource mobilization group recommended streamlining expenditures as well as increasing revenues by lowering the sales tax and increasing the tax base.
To prevent tax abuse and evasion, agriculture, services, and wholesale and retail trade should be placed under the tax net, according to the recommendation. There should be a single tax agency to avoid inefficiencies.