THE Shahbaz Sharif government is all set to roll out its new strategy over the next few weeks to grow the provincial economy by a hefty 8pc in the next three years by creating favourable conditions for massive private investment in both infrastructure projects and industry.
The growth strategy document — Punjab Growth Strategy 2018 — has been developed by a group of senior economists affiliated with the International Growth Centre (IGC), in collaboration with the Punjab Planning and Development Board (P&DB).
“The strategy is an initiative of the chief minister who wants to see the provincial economy grow rapidly and the public service delivery to improve,” a P&DB official told Dawn last week.
‘The success or failure of the strategy largely hinges on its implementation. The province may not achieve the targeted growth rate but the recommendations of the strategy will create [favourable] conditions for rapid economic growth in the country’s largest province’
The government had originally planned to roll out the document later this month. “But the launch is understood to have been delayed until early next month owing to the recent Lahore Church attacks,” one of the economists involved in the writing of the draft strategy said.
The IGC economists and researchers have been working on this since June last year.
The economist said the Punjab government had requested the IGC to form a group of economists and experts to work with various provincial departments and help them develop specific areas of policy reforms and investment on the basis of existing research and evidence.
The primary objective of the document is to make Punjab a “secure, economically vibrant, industrialised and knowledge-based province, which is prosperous and competitive,” says the P&DB document.
The strategy, said the official, attempts to find solutions to key challenges — an underutilised manufacturing capacity, energy shortages, stagnant exports, low productivity, unemployment, skill shortages, and a difficult security situation — facing the provincial economy to realise the development vision of the provincial government.
The P&DB officials say the strategy will help the province achieve 8pc economic growth (real gross regional product growth rate), increase annual private investment in the provincial economy to $17.5bn, raise its exports by 15pc a year and create 1m jobs every year.
They are hopeful that the kind of growth the government is looking for will make it possible to achieve the Millennium Development Goals (MDGs) and also target sustainable development and significantly improve security conditions across the province.
The strategy focuses on reform and development of key sectors of the economy like industry, cities, agriculture, skills, education, and health. For each sector, the aim is to identify economic growth-enhancing policy interventions as well as investment projects for the government, says a P&DB paper.
Nevertheless, critics of the Punjab government’s development policies remain quite sceptical about the implementation of the strategy and successful achievement of the goals set in it by the government.
“The Punjab government has set some very ambitious targets for itself. I doubt these can be achieved given the energy constraints and security conditions prevailing in the province at the moment,” said economic analyst Shahid Zia.
He was also doubtful about “private investors stepping forward to put their money in manufacturing and infrastructure projects at a time when the solution to the energy and security issues is nowhere in sight and they are unsure about the direction of economic policies”.
The IGC economist agreed that the growth target set by the Shahbaz Sharif government was ambitious but not unachievable.
“The success or failure of the strategy largely hinges on its implementation. The province may not achieve the targeted growth rate but the recommendations of the strategy will create [favourable] conditions for rapid economic growth in the country’s largest province,” he said. He added that a growth strategy implementation framework is also being prepared for its execution.
“The thing is that Punjab has to grow at a much faster pace than the rest of Pakistan if the national economy is to be pulled out of its current, slow growth mould. Various studies have shown that the performance of the national economy is heavily dependent on the economic performance of Punjab, which contributes 60pc to the country’s economy.
“This is what the new provincial growth strategy aims at: remove the constraints to growth in Punjab and give a big push to the national economy,” he said.
Published in Dawn, Economic & Business, March 23rd, 2015