The current exercise by the federal government to formulate a five-year plan is seen by many as somewhat misplaced in view of the expected three-year top-priority International Monetary Fund (IMF) stabilisation programme.
In the past, as well, the 23 bailouts by the Fund and its reforms agenda took precedence over implementations of five-year plans; to quote an analyst, “Much of the five-year plans… are paperwork exercises.”
One may also note that centralised planning also suffers from many deficiencies in terms of formulation and execution, including erratic and unsustainable modes of financing and the absence of clearly defined federal domains that duplicate provincial functions and cannot be funded by a cash-strapped centre.
That is the reason that on August 19, the Senate Functional Devolution Committee unanimously agreed to abolish the “inefficient” federal ministries of Industries and Production and Energy (petroleum division) and devolve their responsibilities to provinces.
The government is trying to amalgamate drafts of different economic plans from various sources
However, recognising the need to come out of the IMF bailouts and stability programmes, it is argued that Pakistan must develop a home-grown economic model that incorporates the IMF-induced reforms. A former federal minister, Engineer Khurram Dastagir Khan, is of the view that the government need not be trapped on the carousal of outmoded monetary dogma.
Pakistan’s long-term strategic planning is currently evolving. On May 16 2023, the Planning Commission announced the 5Es framework (or roadmap) for achieving the economy’s turnaround. It was focused on export growth, environmental sustainability, energy security, equity and empowerment, and E-Pakistan.
An important task of the country’s leadership should be to guide empowered people by identifying innovative ideas they can adopt for the country’s progress and prosperity
The 5Es were followed by what is stated as a home-grown plan prepared by UK economist Stefan Dercon. Now, a seven-member committee headed by Deputy Prime Minister Ishaq Dar is reviewing the Dercon draft which, it was found, deals with those points that have been reiterated by Pakistani economists and are mentioned in various official reports.
With the government having entered a three-year IMF programme, critics argue that there was no need to engage Mr Dercon.
The first committee meeting on August 16, chaired by Mr Dar, decided that the Dercon draft would also be reviewed in the light of PML-N’s election manifesto. In fact, it may be added that it is imperative that the home-grown political or economic models are based on the programmes, policies, and strategies approved by the voters in a free and fair election.
The incorporation of the PML-N manifesto in the final draft for submission to the cabinet may help set economic planning in a democratic direction. The Planning Commission’s 5Es framework will also be incorporated in the final draft, while feedback from stakeholders will ensure that Mr Dercon’s input is robust, cohesive and free from inconsistencies.
The effort going into the formulation of the plan can also be seen in the backdrop of the developing domestic and international situation.
Here, it is worth quoting Jayati Ghosh, Professor of Economics at the University of Massachusetts, who sees Bangladesh’s political turmoil as a warning to India, world leaders, and the IMF; Pakistan has recently witnessed street demonstrations on various issues.
The PML-N manifesto promised to reduce poverty from nearly 40 per cent to less than 25pc within five years through an annual growth of 6pc and a single-digit inflation rate. The party did not set very ambitious targets for tax revenues. It pledged to raise the tax-to-GDP ratio from 10.4pc to 13.5pc by the end of 2029 — a 0.7pc annual increase.
The plan will also include the ongoing programmes. On August 16, Prime Minister Shehbaz decided to put the development of the neglected small and medium enterprise (SME) sector and gemstone industry under his personal supervision — he will also personally head the steering committee to promote the gemstone industry.
He directed that the Small and Medium Enterprises Development Authority be brought under the prime minister’s office.
At the same time, the State Bank has decided to increase the clean lending limit by 100pc to Rs10 million for SMEs against personal guarantees.
Prime Minister Shehbaz further directed the authorities to make a comprehensive action plan for skill training of manpower in modern mining, polishing, chiselling and value-addition. Currently 80pc of gemstone exports consist of raw materials. He will also head a proposed digitisation commission, says State Information Technology Minister Shaza Fatima Khawaja.
The Planning Commission observed that collective wisdom helped in developing the 5Es, which were considered vital factors for the country’s economic progress and prosperity.
The issues of equity and empowerment, embodied in the 5Es, have not been prioritised. By fostering a culture of empowerment, says National Assembly member Sharmila Faruqi, Pakistan can pave the way for a brighter future. It is time to invest in the people.
There is also a need to step up community development, aptly defined by Sue Kenny and Phil Connors as “A holistic approach grounded in the principles of empowerment, human rights, inclusion, social justice, self-determination and collective action.”
An important task of the country’s leadership should be to guide empowered people by identifying innovative ideas they can adopt for the country’s progress and prosperity. And, as political analyst Imran Jan reminds us in his The Express Tribune opinion piece, “The idea of evolution being continuous doesn’t receive its fair share of attention.”
Published in Dawn, The Business and Finance Weekly, August 26th, 2024
