‘Agriculture framework under CPEC to focus on JVs’

ISLAMABAD: Federal Minister for Planning Makhdum Khusro Bakhtyar has said agriculture framework under the China-Pakistan Economic Corridor (CPEC) focused on joint ventures, value-addition, cold chain management, and marketing and branding to overcome socioeconomic weaknesses.

Addressing the PIDE conference on Wednesday, the minister said that the SME sector has been identified as one of the key sector of economic growth, and CPEC was an opportunity for Pakistan and China for growth and prosperity, both.

The minister said consumption in Pakistan was 93 percent of the GDP, highest among emerging economies, whereas in Bangladesh, consumption was about 74 percent. “The saving rate in Pakistan is less than half of other countries of the region,” he said, urging to increase saving, and to balance between direct and indirect taxes.

Khusro Bakhtyar said the service sector contributed 56 percent to domestic GDP, but its share in exports was very small. He pointed out that imports from China have reached $18 billion.

“The country needs import substitution policies, and the government is devising policy packages for this purpose,” he added. CPEC was an opportunity for Pakistan and China for growth and prosperity.

Shahid Hussain Assad, who discussed “Revenue Management, Issues and Challenges” at the conference, said Pakistan faced several issues in tax collection, including the narrow tax base and low tax to GDP ratio. “Large informal economy proves to be a reason in loss of taxable income,” he said.

He also pointed to political lobbying tax exemptions and concessions as reasons for low tax collection. He suggested simplification of tax procedures and harmonisation of federal and provincial taxation to broaden the tax base.

Riaz Riazuldin, former acting governor of State Bank of Pakistan discussed “Exchange Rate Management in Pakistan” and said the management regimes kept changing, and poor rate management was one of the reasons behind poor export performance. He said remittances had to be boosted to stabilise the exchange rate.

Dr Ashfaq Hasan Khan, member, Economic Advisory Council, argued that exchange was a very weak determinant of exports and exchange rate has very adverse impact on the external debt. He said any potential benefit of exchange rate was wiped out due to increase in external debt, and in addition the devaluation raises the costs of inputs for local production which hurts the economy badly.

Dr Khan emphasised on the need to control public debt and boost private investments.

Dr Asad Zaman, vice chancellor, PIDE, concluded the session, and argued that the exchange rate could only be managed at the cost of foreign reserves, which was rather bad for the economy.

A panel discussion on “Governance, Housing, Poverty and Employment” generated debate on pulsing issues of poverty, lack of employment opportunities, insufficient housing facilities, as well as the dearth of institutional capacity in Pakistan.

Dr Talat Anwar, professor of Public Policy at PIDE, said Pakistan should learn from China’s experiences by evaluating their experience on poverty reduction strategies. “Low rent houses for poor, targeted health reforms, education emergency, and emergency provision are the main lessons from China for Pakistan,” he added.

Abdul Wajid Rana, program leader, IFPRI, Pakistan, emphasised the civil service reforms in Pakistan.

“Civil service reforms are necessary for fiscal stability and for collaboration between politicians and civil servants,” he said.

Rana was of the view that the current reforms should be focused on emerging challenges and work towards increasing collaboration. He said that ineffectiveness of state institutions was undermining Pakistan’s economic, social, and political development.

Emerging challenges of civil service reforms should be centralisation to decentralisation, hierarchical to collaborative federation, top down to participative governance, and globalisation, as well as SDGs, technical advancement, accountability, vibrant judiciary, and active legislative committees, he added.