CONFLICT BETWEEN POLITICAL ELITES, EXTERNAL IMBALACES AND CORRUPTION A ROOT CAUSE OF ECONOMIC CRISIS
Conflict between political elites, external debt burden and corruption is identified as the main reasons of economic slowdown, which implies very limited policy options for economic progress. This was concluded in the panel discussion at the University of Karachi, which was jointly organized by the Applied Economics Research Centre (AERC) and the Social Policy Development Centre (SPDC), held today on May 23, 2023.
The event was attended by a large gathering of academia and general public. The panel for discussion main objective was to identify the policy choice during the current economic crisis. Earlier, Dr. Nooreen Mujahid, Director AERC, in her opining remarks stated that the current economic situation of the country is dire with liquidity of foreign exchange reserves below the critical level, looming debt repayments. She reiterate that academia must actively engage in ignite discussion in such times and this discussion is aimed towards fulfilling its role for giving inputs and suggestion to overcome this economic crisis.
Mr. Muhammad Asif Iqbal, Managing Director SPDC informed that our country has very limited option as almost all targets set for this year has been missed, only few of them were achieved. Main objective of the policies for federal budgets are attainment of maximum economic growth, stabilization and redistribution of government’s revenues. Which are by large could not achieve and the prediction of GDP growth for this year is less than one percent.
Mr. Khurram Hussain was of the view that the high dependency on external borrowing has been proved as major reason for slowdown. At that time government was claiming that these loans will bring economic growth and this growth will help in repayment of the foreign loans, but it couldn’t happen. Policymakers are busy in tackling the political situation, which is a conflict of political elites.
Shabbar Zaidi, former Chairman FBR, proposed that policy makers should consider promoting geographical segmentation of industrial production. For example, Northern part of Pakistan is to produce for domestic consumption while southern part to produce for exports. Eng. M.A. Jabbar, Vice President FPCCI, was of the view that corruption and non technical decisions, specially for new projects and loss in the distribution of energy channels need to be addressed for a long term solution.