Experts propose strategies to strengthen financial institutions, capital markets

LAHORE: Deputy Governor of the State Bank of Pakistan, Dr. Inayat Hussain, has suggested a comprehensive reform program to address vulnerabilities and bottlenecks across all sectors of Pakistan's economy.

Speaking on the second and final day of the Sixteenth International Conference on "Managing Pakistan's Economy" at the Lahore School of Economics, Dr. Hussain emphasised the need for documentation of the economy and the digitalsation of the conventional banking system.

He also stressed the importance of maintaining a manageable level of fiscal deficits. Dr. Jamshed Uppal, Associate Professor of Finance at the Catholic University of America, proposed an integrated and long-term strategy that would strengthen financial institutions and markets through public-private dialogue.

Dr. Uppal suggested policies to create a supportive and complementary environment for export growth, including a dual exchange rate policy, long-term trade financing to promote exports, and FDI based on increasing exports.

He also stressed the importance of restoring fiscal balance through financial discipline for implementing required strategies for export-led growth. Khalid Mirza, former chairman of the Competition Commission of Pakistan and Securities and Exchange Commission, stressed the importance of macroeconomic stability, efficacious financial institutions, recognized government norms, and capable, empowered, and independent regulators for a robust economy and financial stability.

He recommended that the capital market's supply-side financial security mechanisms be strengthened through investment banks regulated by SECP and security exchanges. Dr. Ishrat Hussain discussed Pakistan's long-term issues of fundamental economic rights and stressed the role of productivity, mechanization, and service providers in enhancing food security.

He recommended policies to enhance the income of the rural population, restructure agricultural institutions, and provide agriculture financing targeted to small farmers at competitive rates. He also stressed the importance of availability, access, and affordability for small farmers.

Dr. Waqar Wadho discussed the relationship between technological innovation and employment growth in Pakistan. He demonstrated that technological innovation does induce employment growth and that, although there may be some job losses with new technologies, more jobs are created as a result of technological innovation."

Dr. Hamna Ahmed discussed unleashing Pakistan’s human capital potential through education, and the disparity in gender in schools. She recommended improving the public financing of education to bring more children to school while improving learning outcomes and overall efficacy of the education system. also recommended offering alternative learning pathways for children who have never been to school and for the ones who drop out.

Ms. Haja Ranaivo, Trade Development Officer of the permanent Mission of Pakistan to the WTO, introduced forums and joint initiatives to address the issues of climate change and trade.

stressed the importance of lowering tariffs on environmentally friendly goods and services. She acknowledged the contribution of Lahore School of Economics efforts to develop the policies related to trade and environment.