Economist Appreciates PM's Poverty Alleviation Program

Senior economist, Dr. Shahida Wizarat appreciative of Poverty Alleviation (Ehsas) Program announced by Prime Minister, Imran Khan has sought a pragmatic approach to generate funds for the same on self help basis

KARACHI, (UrduPoint / Pakistan Point News - 3rd Apr, 2019 ) :Senior economist, Dr. Shahida Wizarat appreciative of Poverty Alleviation (Ehsas) Program announced by Prime Minister, Imran Khan has sought a pragmatic approach to generate funds for the same on self help basis.

Talking to APP here on Wednesday, she said dependence on foreign donation or assistance will simply nullify the desired objectives and further aggravate the pressure on the economy with severe implications on the public well being.

"Pakistan a resource rich country holds ample opportunities to make the scheme extremely successful and meaningful," said the seasoned researcher serving as Head of Department (Economics) and Dean College of Economics and Social Development (CESD), Institute of business Management (IOBM), Karachi.

The objective to empower people at the lowest rung of the socio- economic strata under "Ehsas" initiative, she said required optimum sincerity and absolute commitment to the cause.

Dr. Wizarat, also a former Director of Applied Economics Research Centre, Karachi University elaborating her stance said Pakistan through series of interventions, can sustain the social safety cum poverty alleviation program till the much cherished goals are achieved for good.

"An immediate option is securing better deals for supply of goods, services and resources provided to different countries and foreign companies," she said.

Referring to instances where natural resources were handed at zero royalty rates or at below market rates to foreign companies, she also drew attention towards permission granted over the years for transportation of armaments, goods and services without remuneration to rich countries.

"Our over generosity towards rich and powerful countries has converted us into a beggar with all the accompanying humiliation that it entails," regretted the economist.

To a query, Dr. Wizarat said countries using Pakistan's highways, roads, air routes, etc must be charged market based rates, with prior knowledge and information about the total amount it will contribute.

The economist emphasized that all such agreements signed between Pakistan and countries for the use of former's infrastructure and services, development of infrastructure, natural resources, etc, must be ratified by different pillars of the government and the state.

"This would also preempt rent seeking and personal interests subordinating national interest," she said mentioning that even a small country like Kazakhstan once used as an alternative land and air routes earned billions of Dollars whereas Pakistan was paid nothing," she said.

The economist was of the opinion that compensation for the supply of strategic goods and services and natural resources being made through small increases in export earnings were of little national benefit as are repeatedly exposed to IMF dictated devaluations.

With particular reference to empower the women and strengthening of rural economy under "Ehsas" program, Dr. Shahida Wizarat said Pakistan being an agricultural country has a lot of potential to export food items, fruits and vegetables to the European Union, the Russian Federation and other Shanghai Cooperation Organisation (SCO) countries.

"But consumers in these countries are health and nutrition conscious and the governments are equally alive to the situation and enacting laws to ensure quality assurance of food products imported in these countries," she said.

In the given scenario, she said, even if Pakistan is able to produce a large exportable surplus, our exports will be shunned by the health conscious consumers in these countries.

Dr. Wizarat referred to instances when Pakistan's fish exports to the European Union worth � 50 a year were suspended as European food officials found the quality deficient and unhygienic, whereas GM traces were recently found in a sample of mango pulp sent to Russia, which was actually in the powder used as a preservative.

Under the given circumstances implementation of Cartegna Protocol and Phytosanitary standards, she said was a panacea to avert free fall in the export of food, cotton and cotton manufactures faced with challenges related to quality assurance of relevant products.

"As a policy we have to adopt Cartagena Protocols on risk assessment and biodiversity and pass the Labelling Law so that we can categorize our exports into organic, hybrid and Bt," said the researcher.

She warned that any indifference towards the issue would cost the country in terms of losing export markets aggravating the crisis linked to current account and balance of payments.

The economist reiterated that country was in dire need to explore alternative export commodities and markets for fish, textile yarn, wearing apparel and accessories, sports goods, leather and leather manufacturers and surgical instruments.

About other available options to pull country out of the series of economy related challenges, she recommended need of an Alternative Strategy in terms of "Gold Reserve Management" that could further be used to increase investment, employment, increase GDP growth and promote exports.

It may have been abandoned in many of the countries, the researcher reminded that India continues to successfully use gold reserve management to maintain its liquid foreign exchange reserves by buying gold quietly from private suppliers and selling it at an appropriate time to enhance its foreign exchange reserves.

"This strategy has repeatedly helped India to strengthen its liquid foreign exchange reserves when required through a buy back agreement in foreign currencies," said Dr. Shahida Wizarat.

She also took strong exception to deregulation and financial liberalization initiated during the 1990s allowing full convertibility of Rupee in four main currencies including the Dollar.

"Despite capital account liberalization and rupee convertibility, massive capital inflows have not been witnessed, but there have been massive outflows of capital draining the economy of foreign exchange earnings," she said.

Dr, Wizarat emphasized that said country must act according to its own macroeconomic needs and formulate capital controls that respond to associated challenges.

With regard to frequently proposed ban on the import of luxury and consumer goods, she said selective demand restraint rather than across the board demand restraint reduces the import demand for consumer and luxury goods, creating space for the import of essential capital goods, industrial raw material and machinery required for economic development.

"The strategy also passes on the cost of adjustment to elites and wealthy classes, instead of the middle and poor classes," she said reminding that cost borne by the wealthy classes will be marginal as compared with the tremendous socioeconomic-political cost entailedunder any foreign funded strategy.