ISLAMABAD: PTI MNA and former finance minister Asad Umar criticised the flawed decision making process in Pakistan, saying the decisions are not based on evidences, but on a whim.
“Pakistan’s basic problem is lack of decision making on evidences as the decisions are taken on a whim,” Umar, who chairs National Assembly Standing Committee on Finance, said at a seminar. Pakistan Institute of Development Economics (PIDE) hosted the seminar.
The lawmaker said when he used to chair meetings of the Executive Committee of National Economic Council as the finance minister during his eight-month tenure he did not have any evidence-based research about how investment decision was going to benefit the economy.
Umar said the International Monetary Fund’s (IMF) macroeconomic modeling is misplaced as it uses the same model across all the regional economies.
“The IMF model lowers projection of GDP growth in case of Pakistan,” he said. “In recent months such projections have proved consistently wrong.”
Umar said he was amazed to see economic issues dominating the media screens during his stay as the finance minister. “That had never happened in the past.”
“Two years ago when the economic crisis was brewing TV anchors had viewpoints the shows on economic issues caused television rating point to fall drastically, but when he took charge of the economy everyone was doing economic analysis in their TV programs,” he said. He said the prime minister used to call frequent meetings but during the eight-month period he had never listened about any research being done by PIDE or any other institution.
“This indicates that the research relevant to policymakers is not taking place here or if happening, it could not find out its end consumers,” he said. “I don’t know which one is correct. There is a need to fix it whatever is relevant in this case.”
The former finance minister said Q Block (ministry of finance) was completely clueless about research-based decision making on economic front. Citing an example, he said that when the IMF team was supposed to come to Islamabad he had asked the ministry of finance to prepare different economic scenarios to know what would be an impact on macroeconomic projection with change in aggregate demand of the economy. “After three days, one senior bureaucrat came to me and told that they could come up with GDP projection by fiscal year 2023.”
“I didn’t know much about the Planning Commission,” he added.
The NA body chief said researches are needed whether policymakers focus on motorway construction or investment in higher education.
“The potential growth of regional trade could be another topic of research as we cannot ignore geopolitics realities but the policymakers should have knowledge what is the cost of not materialising regional trade,” he said.
Umar said there is a very little research work available on impact of stabilisation on inequality in Pakistan. Good researches might have been done, but the policymakers did not have access to them, he added.
Former finance minister said there is another area of productivity where there is a need to do more researches. The shining star on privatisation front is banking sector, but its performance should not be judged on the basis of ‘beautiful’ branches or how much money has been made by shareholders, but it should be on account of mobilisation of savings and the loans provided to most-efficient industry.
In the post-privatisation era, the deposit-to-GDP ratio has plummeted. “A good quality research that is communicated properly could change the landscape of the country,” he said, citing a PIDE research on 22 richest families that had a far-reaching impact on the course of the country.
Former finance minister said Pakistan Telecommunication Company was the biggest privatisation transaction, but the firm was handed over to another public sector entity. PIDE Vice Chancellor Nadeemul Haq stressed need of establishing linkages between researches and policymakers.
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