ISLAMABAD, Nov 21 (APP): PIDE Vice Chancellor and PSDE President Dr Nadeem Ul Haque has stressed the need for giving due attention to attracting investment instead of getting loans for sustainable economic growth.
He said the economic system in Pakistan was on a ‘life support system”, and emphasized on exploring measures to tackle challenges like the surge in the exchange rate of rupee with other currencies, unemployment, and aid-debt trap.
He was addressing the inaugural session of a three-day Annual General Meeting (AGM) and conference of the Pakistan Society of Development Economists (PSDE) on the theme “Breaking the Aid–Debt Chains”, organized by the Pakistan Institute of Development Economics (PIDE) in collaboration with Bahaduddin Zakariya University (BZU) at the latter’s Jinnah Auditorium in Multan, a news release said on Tuesday.
“. . . . the focus should be shifted to investment and finding ways to increase it,” he stressed while pointing out the irony of having too many plans yet too little development.
The PIDE VC emphasized that the solution to the economic quagmire was not getting more debts, criticizing the over-reliance on loans, particularly from institutions like the International Monetary Fund.
Pakistan was trapped in the perpetual cycle of aid-debt traps involving IMF, donors, consultants, and Transparency International, he regretted.
Dr Nadeem also questioned the effectiveness of raising taxes and the lack of challenges to consultants in the development process.
He highlighted the significant contributions of renowned economist late Dr Mahbub ul Haq to PIDE.
Dr Nadeem also highlighted the role of both PIDE and PSDE in raising pertinent questions and engaging in an impactful research about the country’s wide-ranging socio-economic issues, stressing the need for a paradigm shift in thinking and the importance of asking critical questions.
PSDE Secretary Dr Iftikhar Ahmad reiterated the PIDE’s desire to initiate and collaborate on further research with researchers in South Punjab.
He said that in this year’s conference, two-panel discussions were focused on South Punjab, featuring panelists from academia and regional centers.
The first-panel discussion of the conference was on “Foreign Aid: Boon or Bane?,” moderated by Shahid Mahmood, Research Fellow at PIDE, with panelists Asad Hayauddin, former Secretary of the Economic Affairs Division, Tobias Haque, Lead Country Economist for Pakistan at the World Bank, and Naveed Aziz, Senior Governance Advisor to the FCDO.
The moderator said that since 1950, Pakistan received over USD 200 billion in foreign aid, out of which a significant chunk had been in the form of loans, and a large amount was “tied aid”.
He said the donor agencies influenced major policy decisions; however, there was a dearth of cost-benefit analysis of the projects.
Asad Hayauddin said it was unfortunate that foreign donor agencies had been helping set Pakistan’s development direction.
He said two neighbouring countries of Pakistan had also turned to the IMF, but they remained stuck to the plan to reverse the crises. Contrary to them, he regretted that “Pakistan, on the other hand, deviates from the agreed-upon path after gaining some sense of stability following support from the IMF and other donor agencies.”
Tobias Haque said that there were numerous examples where countries went to the donors with a homegrown development plan and sought development agencies’ financial and technical assistance.
Likewise, he said Pakistan needed to develop a crisp indigenous development plan and then seek donors’ assistance. “In such a case, the donors would have very little wiggle room to deny assistance on Pakistan’s terms.”
Naveed Aziz said aid utilization had not necessarily been entirely negative in Pakistan, and aid dependence in some areas had come down as well.
All panelists agreed that Pakistan needs to develop a long-term development plan with a clear indication of what support it requires from external sources and to what extent. Pakistan’s debt utilization stands as a major issue that has to be immediately improved. Pakistan needs to realize that aid is not the solution to problems, instead, it is just a tool to facilitate the implementation of development plans and achieving the set goals.
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.