Lahore: As Pakistan navigates the complexities of a three-year economic stabilization program backed by the International Monetary Fund (IMF), experts convened to assess its impacts and propose critical adjustments. The program, set for 2024-2027, has prompted discussions on its effectiveness in addressing various economic challenges.
One primary concern is Pakistan’s external debt, which stands at approximately $130 billion, representing 23 percent of the nation’s GDP. Analysts have highlighted the need for a strategic approach to reduce the annually rolled-over external debt of $12 billion, currently supported by deposits from China, Saudi Arabia, and the UAE. Experts suggest utilizing increased workers’ remittances to retire $3 billion of this debt annually over the next four years.
The stabilization strategy has induced significant restructuring within the economy, with adverse effects on industrial and agricultural sectors. Concerns were raised about premature deindustrialization, particularly in light engineering, and the dismantling of traditional agricultural practices. A comprehensive transition plan is urged to support potential competitive industries and new agricultural crops.
Current economic policies are also criticized for discouraging urban sector development. Adjustments to property taxation and the perception of real estate investments are seen as factors driving capital flight and transforming urban areas into exclusive enclaves. Calls for policy reversals aim to foster inclusive urban growth.
The concentration of wealth among approximately 100 families, who control a substantial portion of the economy, has ignited debates around privatization efforts. Experts propose compulsory stock exchange listings for sizable registered companies to mitigate further wealth concentration.
Social protection policies have drawn criticism for their inadequacy, with poverty levels soaring to affect 40% of the population. Recommendations include expanding coverage from the bottom 10% to 20% of the population and increasing financial support per family.
Lastly, the hesitancy in adopting solar energy policies is seen as a missed opportunity in reducing reliance on imported oil and gas. Experts call for constitutional amendments to support solar energy initiatives and a halt to new dam constructions for power generation.
The conference, hosted by the Lahore School of Economics, seeks to leverage insights from renowned economists worldwide to guide Pakistan’s economic policymaking in the coming years.