ISLAMABAD: Economic experts on Saturday stressed the need for fundamental reforms in national economic system to reduce reliance on foreign and domestic debt for development and prosperity of the country.Addressing a daylong third National Debt Conference, they stressed the need to enhance the competitiveness of the local industrial sector for promoting domestic exports and reduce imports.
Member National Assembly Asad Omer said introducing grassroots level reforms will enhance the industrial competitiveness and promote exports.
He also urged to enhance the expenditure in research and development activities, particularly in the agriculture sector, as the farm productivity and output is being reduced in the country as compared to other countries of the region.
Omer also asked for reforms in the local taxation system to increase revenues and to fulfill the developmental expenditures instead of domestic and external lending.
He called for reducing the share of indirect taxes, which, he said, comprises around 87 percent of the total revenues.
Competitiveness achieve by institutional reforms would boost the performance of all the local organisations and reduce reliance on foreign and domestic debts, he added.
Director General of Directorate of National Savings Zafar Masud said that the national debt swelled due to increase in development expenditures in different social sector development projects.
The China-Pakistan Economic Corridor (CPEC) projects would help enhance the GDP growth by two percent to 2.5 percent, as it is expected to create around five million new job opportunities.
He said the stock exchange is performing well, whereas the country’s risk premium has also reduced by 200 basis points.
"We will be in comfort zone by next four to five years, he said, adding that structural reforms and fundamental changes are required to sustain these gains for sustainable economic development.
Research Economist of Pakistan Institute of Development Economics M Ali Kemal said that higher growth would enable to reduce foreign debt.
In 2015, domestic debt was recorded at 44.5 percent of the GDP, whereas external debt was around 18.7 percent, he said, adding that higher economic growth is vital to reduce the debt burden.
Former governor of the State Bank of Pakistan (SBP) Shahid Hassan Kardar said that a debt strategy is required to reduce the burdens of foreign and local liabilities.
