PSDE’s 3-day AGM, Conference Conclude

A three-day Annual General Meeting (AGM) and conference of the Pakistan Society of Development Economists (PSDE) titled “Breaking the Aid-Debt Chains” concluded on Thursday

ISLAMABAD, (UrduPoint / Pakistan Point News - 23rd Nov, 2023) A three-day Annual General Meeting (AGM) and conference of the Pakistan Society of Development Economists (PSDE) titled “Breaking the Aid-Debt Chains” concluded on Thursday.

It was organized by the Pakistan Institute of Development Economics (PIDE), Islamabad in collaboration with Bahauddin Zakariya University (BZU) Multan at the latter’s Jinnah Auditorium, a news release here said.

The final day of the conference started with the third parallel technical session, during which several papers on diverse topics were presented by researchers from different parts of the country.

The topics of the papers included the lifetime cost of public sector employees, Public Sector Development Programme, public financial management, remittances, debt threat and gender.

The special lecture on “Fiscal Management for the Revival of the Economy” was delivered by Faisal Rashid of the Oxford Policy Management.

He viewed that Pakistan’s current situation was the most challenging for its economy.

He said the country had developed a major debt reliance to finance its high fiscal deficit as revenues continued to remain inadequate compared to the ever-increasing expenditures.

“The tax-GDP ratio remains low, while leakages in the energy sector have increased circular debt to unsustainable levels,” he said, adding the pension schemes continued becoming unaffordable for the Federal Government, which also continued to overburden itself by undertaking development projects of even the devolved subjects.

In that scenario, he said, it was important to think of the possible options that Pakistan had to solve the problems.

“In the short to medium term, there is no doubt that Pakistan needs to turn towards the IMF (International Monetary Fund) for support,” he said, adding a typical IMF programme required countries to focus on reducing fiscal deficits, and employ tight monetary policy.

In recent years, he said, the IMF had pressed Pakistan to reform its state-owned enterprises’ governance and energy sectors on a priority basis.

Faisal Rashid said in the medium to long term, Pakistan needed to develop an economic reforms plan. “There must be a focus on increasing revenue through additional untapped sectors, while the energy sector needs immediate reformation too," he added.

He said DISCOs (distribution companies [electricity]) must be privatized, while efforts must be made to minimize transmission and distribution losses.

The state-owned enterprises, he said, were the white elephants that needed immediate reform efforts, with a meaningful impact in the long term.

A panel discussion, arranged by UNICEF, was on “Improving the Quality of Public Spending”.

The session was moderated by Shaaf Najib of PIDE, while the panelists included Dr Manzoor Ahmed, trade specialist, Asim Bashir Khan, development economist, Talat Anwar, BZU, and Ahmed Waqar Qasim, PIDE.

Shaaf Najib introduced the topic by asking whether the revenues were to be blamed for debt or the expenditures. He said the data showed that debt servicing accounted for the largest chunk of government expenditures.

Ahmed Waqar Qasim said that when 87 percent of loanable funds in the system ended up getting diverted to the government, that left only 13 percent available to lend to the private sector.

“The impact can be looked at from the perspective of banks, private businesses, and the government. For banks, loans end up being given to big, established businesses rather than smaller firms due to high competition for limited resources.”

Manzoor Ahmad stressed the need for making the PEPRA (Pakistan Electronic Media Regulatory Authority) rules more effective. “Audit objections are made on frivolous activities, but not on the feasibility and efficacy of staffing, and performance evaluations.”

Asim Bashir asked for bringing down the interest rate to improve the debt situation from its current unsustainable levels.

Regarding improving service delivery, he said it was a demand-side problem as well as a supply constant which resulted in budget allocations that were not appropriate to the country's needs and also went against conventional wisdom. “Delivery can be improved if decision-making can be rationalized.”

Manzoor Ahmad suggested bringing in automation and simplifying regulatory and agency oversight, actively promoting trade with neighbours and allowing the private sector to work, creating a favourable environment for greater trade.

PIDE Vice-Chancellor Dr Nadeem Ul Haque suggested rethinking whether the government needed to keep spending on education and health.

He further lamented why building more roads, flyovers, and infrastructure for the privileged few was not questioned by the academia and other circles.

There also was a special invited lecture on the programme, delivered by Abid Aman Burki, Professor Emeritus at LUMS. The title of his talk was “Aid Effectiveness Revisited in the Context of Pakistan”.

The conference concluded with a special session titled “Youth Voice” and a vote of thanks.

The co-hosts of PSDE’s 37th Annual Conference, organized by PIDE, include the World Bank Group, UNICEF, RASTA, the Bank of Punjab, Pakistan Poverty Alleviation Fund, Saudi Pak Agricultural and Industrial Investment Company, and BZU School of Economics.