Pakistan Economic Forum

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Highlights from PEF III (November 2015)

Like all countries, Pakistan also faces a number of issues/challenges, which change in terms of gravity and character over a period of time. For the wellbeing and progress of the Country in the 21st Century, it is critical that these issues/challenges are identified, prioritized and debated annually, leading to pragmatic recommendations for the decision makers at the very highest level. With the above objective in mind, the Pakistan Business Council (PBC) is sponsoring the Pakistan Economic Forum (PEF), a gathering of Pakistan’s intellectual elite. The PBC is an apolitical Think-Tank cum Policy Advocacy Institution representing 42 of Pakistan’s largest Corporations/Business Groups, including MNCs that have a stake in the Country’s rapid economic growth to meet the rising aspirations of its people. Preferably, each year the PEF with the support of PBC will identify some of the most critical issues/challenges being faced by the country. Panels to discuss each issue/challenge will be formed. Headed by a Chairman and supported by a Co-Chair, each panel, which will comprise of experts/stakeholders, will analyze/debate the issue at hand before coming up with pragmatic recommendations. The PBC will collate all the recommendations and host an event at which the PEF’s recommendations will be presented to the decision makers at the very highest level. It is expected that the quality of the recommendations; the involvement of the stakeholders, and a concerted media effort, will ensure that the recommendations become part of the national discourse and hopefully, form part of future policies of the government.

Integrated Energy Planning and Pakistan’s Energy Future

For nearly six decades, no Pakistani government has made any effort to prepare for the country’s energy requirements. As a consequence, Pakistan has been saddled with “weak institutions, inappropriate pricing policies and insufficient public sector investment”. The net result, according to the government’s figures, by 2030, energy demand in Pakistan will be almost 64 percent greater than projected supply. Unless Pakistan moves to address this shortfall, the country will inevitably pay a huge cost not only in an economic sense, but also in terms of serious social issues and slow progress towards the creation of a stable social and political society. Most governments have resorted to ad hoc measures to deal with Pakistan’s energy needs and have failed to address deep-rooted structural problems in the energy sector. The government’s so-called strategy for placing the country on a sustainable path of development is, in fact, “no more than a long wish-list of projects and intentions”. Pakistan must develop a “comprehensive strategy” for meeting its energy needs over the next quarter century. This position paper includes very concise proposals to overcome the existing energy crisis. These recommendations must be read in conjunction with the Integrated Energy Plan 2010- 2025.

»PEF III – Draft Energy Panel Report on 19-Nov-2015
»PEF III – Energy Panel Presentation on 19-Nov-2015
»PEF II – Draft Energy Panel Report on 17-April-2013
»PEF II – Energy Panel Presentation on 17-April-2013
»PEF I – Energy Panel Report on February 2011

Educating For the Future

The list of issues affecting access to and quality of education in the country is never ending. At the same time however, unlike many other national reforms, it is the experience from around the world that educational reforms are much more complicated and difficult to implement because of a variety of reasons including the large number of stakeholders involved and their competing priorities and values. Besides, the education sector is one of the largest if not the largest national employer. The situation in Pakistan is further complicated by the fact that there exist at least three different education systems in Pakistan (national curriculum and examinations, Madrassa education and overseas systems such as ‘O’ and ‘A’ levels and others); educational priorities and policies have been changing with every change in government; and historically education has received very low priority in terms of funding and human resources. The Education Panel’s deliberations resulted in a long list of over two dozen recommendations in critical areas in education. Considering prevailing political conditions, resource constraints and competing priorities, there was agreement however that it was not practical to expect government to address all of these at this time. Therefore following further reflection, the Panel prioritized eight strategic areas for further consideration by the Pakistan Economic Forum on April 1, 2011 at LUMS, Lahore.

»PEF II – Draft Education Panel Report on 17-April-2013
»PEF II – Education Panel Presentation on 17-April-2013
»PEF I – Draft Education Panel Report on February 2011

Macroeconomic Stability and Sustained Growth

Pakistan’s economy was under extreme stress by mid-2008, principally owing to exceptionally large twin deficits (the fiscal deficit for the FY08 eventually rose of a 10-year high of 7.6 % of GDP and the current account deficit to an all-time high of 8.5 % of GDP). The resulting macroeconomic risks were compounded by the international commodity price shock, the crisis engulfing the international capital markets and domestic political turmoil. The economic situation became more complicated due to severe energy shortages, terrorism and the influx of IDPs. Supply shortages of key staples – despite substantial domestic production – also contributed towards increase in social unrest. Pakistan entered into an IMF supported Macroeconomic Stabilization program in November 2008. Progress so far has been mixed. Pakistan’s economy showed resilience post- floods, despite the drag from the ongoing struggle against militancy however, unfinished structural reforms continue to raise risks to a sustained economic revival.

»PEF III – Draft Macroeconomic Panel Report on 19-Nov-2015
»PEF III – Macroeconomic Panel Presentation on 19-Nov-2015
»PEF II – Draft Macroeconomic Panel Report on 17-April-2013
»PEF II – Macroeconomic Panel Presentation on 17-April-2013
»PEF I – Draft Macroeconomic Panel Report on February 2011

Regional Trade: A Growth Driver

Regional trade has to be seen in the context of Pakistan’s overall economic growth objectives. Pakistan needs economic growth of 7 percent or more for the next four decades. This is just 1 percentage point higher than the growth rate we have achieved in several decades in the past, and only 2 percentage points higher than our average growth rate since 1947. Sustained growth at these rates will double GDP every 10 years, will result in substantial improvement in living standards within a generation and will engender a sense of optimism in the citizens. But there is an important caveat. We have to seek a growth vent (source of growth) that is geographically balanced and thus can be sustained politically. Furthermore, the growth vent we seek requires tapping into lucrative markets outside our borders in a manner that creates several growth nodes viz., a southern and western node (Karachi, the Arabian sea coastline of Sind and Baluchistan), a central node (Multan, Lahore) and a northern node (Peshawar, Abbottabad). A liberalized economic relationship between Pakistan and India and other neighbors (Iran, Central Asia and China) can help achieve all three objectives: a high growth rate that is regionally balanced, and can therefore be sustained for a longer period than we have ever achieved in the past. Seen in this context, while a more conducive trade regime with other regional neighbors is important, the critical area of focus (as viewed by the Pakistan Business Council) is our trade and broader economic relation with India.

»PEF II – Draft Regional Panel Report on 17-April-2013
»PEF II – Regional Trade Panel Presentation on 17-April-2013
»PEF I – Draft Regional Trade Panel Report on February 2011

Social Protection: Targeted, Transparent, Empowering

Pakistan is facing a perfect storm where high inflation and a stagnating economy resulting from the war on extremism, high energy and commodity prices and natural disasters like the recent floods have all combined to create serious economic distress for the poor and vulnerable sections of society. While many of the economic ailments are endemic, the impact has been particularly severe and has accentuated the general lack of opportunity and joblessness resulting in food insecurity and a reversal into poverty for many. It is, therefore, imperative that adequate and effective social protection measures are undertaken at the policy and implementation level. Not only does the present crisis in Pakistan merit a well thought out and coherent social protection program because of the current situation but it is also an important instrument in ultimately creating citizenship based entitlements as enshrined in the Constitution (article 38 a –d), providing economic stability to the poor and achieving the goal of national cohesion through distributive equity and broadly improved social indicators.

»PEF II – Draft Social Protection Panel Report on 17-April-2013
»PEF II – Social Protection Panel Presentation on 17-April-2013
»PEF I – Draft Social Protection Panel Report on February 2011

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