LAHORE: Economists in both public and private sectors have unanimously urged the government to focus on productivity-led growth if it wants to take the country out of the present economic crisis.

They are also of the view the government would have to bridge the saving and investment gaps by introducing policies, compelling people to better utilise their savings in productive sectors rather than parking their investments in real estate/property sectors.

The experts gave their views in a seminar organised jointly by the International Growth Centre (IGC), Consortium for Development and Policy Research (CDPR), Finance and Planning and Development departments here on Tuesday. The event included sessions and panel discussions moderated and participated by the experts.

Demand steps to end investment in property, a stagnant sector

“In July 2018, when we were spending $2.5bn (per month) on imports that led to fast vanishing of foreign reserves, causing the macro economic crisis we are facing today. I don’t blame that it was due to the PML-N government as it had inherited this mess from its predecessor government of the PPP. I also don’t blame the PPP government, as it inherited the same from the Musharraf-led government,” explained Dr Ijaz Nabi, an eminent economist.

He said other factors that added more issues for the economy included poor recoveries by the utility companies —gas, electricity companies etc, non-payment of utility bills by the consumers, trade gap, decline of trade to the gross domestic product and export to GDP ratio, saving and investment gap.

“While the situation was disturbing, the people started using their savings by investing in the stagnant sector —real estate/property that never helps economy to grow. So we will have to take steps that could encourage the people invest in productive sectors — agriculture, industry etc rather than parking their savings in property,” Dr Nabi added.

Planning and Development Department Chairman Habibur Rehman Gilani emphasised on the government’s top development priority of human development, stating that the disproportionate spending on infrastructure in the past had compromised the allocation to the social sector which had adversely impacted the lives of millions of people in the province.

“The top priority of the government at the moment is to rationalise spending and have an equitable development model. We are launching our growth strategy that is going to address all these issues and help us move toward a growth model that is equitable and inclusive,” Mr Gilani said.

“Apart from that we are also putting special emphasis on youth development and will explore all the avenues, including the opportunities under the China-Pakistan Economic Corridor that offers for public-private partnerships and employment generation,” he added.

Provincial Secretary Finance Hamed Yaqoob Sheikh stressed the need for Finance and Planning to work in tandem and importance of strategic planning for effective planning and budget utilization.

World Bank’s country director Patchamuthu Illangovan was of the view that Punjab in particular and Pakistan in general immediately required reduction in fast-increasing population.

“It is very important for Pakistan to reduce its population growth from 2.4 to 1.52 if it wants significant improvement and growth in its economy.” He also sought for an evidence-based decision-making in this regard.

Punjab Finance Minister Makhdum Hashim Jawan Bakht while chairing a session titled “Working with Donors: Improving Programme Design and Implementation” talked about the importance of having properly planned and executed projects for a sustainable development.

These sessions and panel discussions also included the topics, “Opportunities for Agriculture, Identifying Sectoral Priorities and Opportunities, “Enhancing Productivity through Skills and Innovation” and “SMEs as Driver of Growth”.

Published in Dawn, January 23rd, 2019