ISLAMABAD: Former adviser to PM on Institutional Reforms Dr Ishrat Hussain has regretted that his reform package for bringing institutional reforms could not see the light of day during the tenure...
ISLAMABAD: Former adviser to PM on Institutional Reforms Dr Ishrat Hussain has regretted that his reform package for bringing institutional reforms could not see the light of day during the tenure of PTI government owing to political exigency.
As part of the Distinguished Lecture Series, Dr Ishrat Hussain, ex-governor State Bank of Pakistan, delivered a keynote address at the Islamabad Policy Research Institute on Tuesday and called for expediting and institutionalising the reforms. He advocated recalibrating the existing system and called for eliminating bottlenecks through a well-laid-out plan that was proactive and went on to restructure the state-centric edifice.
The world famed economist, who has served the World Bank, said corruption and nepotism had blocked socio-economic growth and the redundant civil structure cadre had added miseries to it. He said that a Rs1 trillion loss was owing to liabilities in the financial sector, as well as unpaid loans. He, nonetheless, pointed out that after privatisation of banks, these loss-generating units were contributing Rs200 billion per annum profit to the exchequer. He said the government intruded into the private sector, which negated its growth in economic indices. He pointed out the flawed taxation sector, wherein only those under the tax net were fleeced and burdened every year while there was no success in widening the tax base. He advocated restructuring of state units and policy reforms, so that it could lower transaction costs, minimise cronies and improve the governance pattern.
While calling for digitalising the economy, he specified that it would lead to easing of government role and buoying productivity and restoring confidence of people and businesses in the state. He said 44 per cent of transactions were still in cash, which led to black economy.
Recalibration of the governance structure should aim at delivering core functions of the state, i.e. provision of basic services, education, health, water sanitation and security, to common citizens in an effective manner and promoting inclusive markets through which all citizens had equal opportunities to participate in the economy.
The restructuring should lower transaction costs and provide access without frictions by curtailing arbitrary exercise of discretionary powers, reducing over-taxation, minimising corruption, cronyism and collusion and ensuring public order and security of life and property, he said, adding that the point to begin this process was strengthening the political and electoral system that moved away from dynastic and elite capture to a broad-based system where the educated middle class individuals of caliber could be attracted to take part in politics.
Intra-party elections from the grassroots level to the national level would open the doors, he observed. Despite the pursuit of policies of liberalisation, deregulation, de-licensing and disinvestment during the last 15 years, the overbearing burden of government interventions in the business life cycle loomed large, he remarked.