PIDE concludes third EconFest 2024 with dynamic discussions and strategic insights for transforming Pakistan’s economy

The third Economy Festival (EconFest 2024), a gathering of distinguished economy and governance experts, offered a deep reform agenda aimed at transforming Pakistan’s economic landscape.

The EconFest 2024, organized by the Pakistan Institute of Development Economics (PIDE), in collaboration with the Research for Social Transformation & Advancement (RASTA) program and the Pakistan Society of Development Economists (PSDE), concluded today at Gandhara Citizens’ Club, Fatima Jinnah Park, Islamabad.

The two-day event, which began on May 25, was a hub of innovative ideas, critical discussions, and strategic insights aimed at transforming Pakistan’s economic landscape.

The festival commenced with a spectacular opening ceremony, where Dr. Nadeem ul Haque, former Deputy Chairman of the Planning Commission and Vice Chancellor of PIDE, set the tone with his opening remarks.

He highlighted PIDE’s commitment to a deep reform agenda, targeting outdated colonial institutions and advocating for a more open and trust-based market economy. He emphasized the need to reduce the government’s 64% footprint on the economy, remove policy uncertainties, and eliminate excessive regulations that stifle investment and innovation. “Our economy is gasping for breath, and it is imperative to allow people to invest and grow, fostering a society built on trust and opportunity,” he said.

Key areas of the reform agenda include energy, education, health, urban development, state-owned enterprises (SOEs), and the Federal Board of Revenue (FBR). “We emphasize decentralization, professionalization, and the use of technology and research to drive governance improvements. The excessive job security without performance and lack of results-based management (RBM) must be addressed to enhance productivity,” Dr Haque said.

Key speakers at the event, including Daniyal Aziz, Nargis Sethi, and Taimur Jhagra, addressed critical inefficiencies in Pakistan’s governance system. They proposed comprehensive reforms across various sectors, emphasizing the need for reducing the size of the federal cabinet, limiting political appointments, and enhancing performance-based governance.

Dr. Durre Nayab, Pro Vice-Chancellor of PIDE, reiterated the necessity for comprehensive economic reforms. She underscored the importance of regulatory modernization, tax reform, and market liberalization. Dr. Faheem Jahangir, Chief of Policy at PIDE, further elaborated on the tax and administrative reforms required to streamline taxes and ensure policy stability, advocating for a uniform tax rate and a pro-export trade policy.

Syed Mohammad Shabbar Zaidi, former Federal Minister and chairman of FBR, tackled misconceptions about taxes in Pakistan. He highlighted the inefficiency in provincial spending, avoiding tax collection in the real estate sector, and the disproportionate allocation of tax revenue, advocating for greater accountability and efficient utilization of funds.

Pakistani economist and former State Bank governor Shahid Kardar highlighted that Pakistan has undergone 14 IMF programs over the past 30 years and now has 58 withholding taxes accounting for 70% of direct tax revenue. He criticized the Neelum-Jhelum project, which has escalated from an initial 85 billion rupees in 2007 to over 500 billion rupees without completion. Kardar urged for a reassessment of priorities, reduction of import duties, and review of the NFC Award, and suggested that the current power sector structure is unsustainable, advocating for a financial commission and the closure of the FBR with a proposed alternative.

The festival also featured sessions on election integrity, media’s role in business reporting, and the future of Pakistan’s bureaucracy. Experts like Rasul Bakhsh Rais, Arifa Noor, and Saroop Ijaz discussed the need for electoral reforms and judicial independence to ensure genuine democratic transitions. In another session, media experts emphasized the importance of business content in news programming, despite its traditionally low viewership compared to political content. Economic journalist Mehtab Haider noted that while individuals are advancing, the country is regressing due to elite capture, calling for reforms.

PIDE EconFest 2024
Hundreds attended Economy Festival 2024 hosted by PIDE in Islamabad on May 25-26, 2024. (Image Credit: PIDE)

Urban regeneration and deregulation were pivotal topics on the second day of EconFest 2024. Panels stressed the importance of political will in city development and the necessity for efficient public transport systems. The PIDE Sludge audit reports identified excessive regulations as barriers to GDP growth, calling for the removal of redundant regulatory requirements to foster economic productivity and investor confidence.

The session, led by anchor Muhammad Malik and featuring Mukarram Ansari, Ahmad Waqar Qasim, and M Ahsan Malik, highlighted how Pakistan’s 122 federal regulatory authorities impose unnecessary licenses, excessive tax burdens, and redundant requirements that stifle business operations and deter investment. The speakers called for modernized regulations to facilitate business activities, enhancing economic productivity and investor confidence.

Experts also discussed making Pakistan’s bureaucracy more efficient and affordable. Hamza Haroon emphasized reducing bureaucratic roles in city governance, aligning incentives with economic performance, and fostering competition within civil services.

Namra Awais advocated for downsizing and modernizing the bureaucracy, addressing inefficiencies in the hiring and skills of officers. Rana Muhammad highlighted the need to align job responsibilities with perks and address pension system leakages. The speakers agreed on monetizing non-monetary benefits but noted that salaries must first be competitive.

In the session “Revisiting Government Jobs,” speakers focused on the cost of living for government servants and the need for downsizing and modernizing the bureaucracy. Moin ul Haque highlighted the repeated failures of civil service reforms in Pakistan, emphasizing the need for successful reforms to identify weaknesses and promote good governance. Nargis Sethi stressed the need to reevaluate government jobs, suggesting that technological advancements should lead to fewer government positions. The session concluded with concerns about political promises to increase government jobs, questioning how to balance this with the need to reduce such positions to ensure a leaner, more effective public sector.

Mukarram Ansari pointed out that, while regulatory authorities worldwide are meant to facilitate businesses, in Pakistan, they often create obstacles through unnecessary licenses and excessive tax burdens, stunting business growth. He stressed the need for removing unnecessary regulations, citing India’s “End of License Raj” as a successful example.

Ahmad Waqar Qasim explained that Pakistan’s regulatory burden, termed RLCOs (registrations, licensing, certifications, and other obstacles), significantly hampers GDP growth. He emphasized that local perspectives are often overlooked in favor of foreign aid directives and that regulations should be based on established rules rather than ad-hoc hurdles. The session concluded with a call for modernizing regulations to enhance economic growth.

Various organizations partnered with PIDE for the event, including The Bank of Punjab, Atlas Honda, LUMS, National Defense University, Pir Mehr Ali Shah ARID Agriculture University, Rawalpindi Women University, The Urban Unit, Chaudhry Nazar Muhammad Department of Economics, National University of Modern Languages, SECP, IM Sciences, Riphah International University, SZABIST, The Millennium Universal College, Oxford University Press, Mr. Books, Paramount Books, and Metropolitan Corporation Islamabad.

EconFest 2024 concluded with a call for collective action to implement the discussed reforms, ensuring a dynamic, self-reliant, and prosperous Pakistan.

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