Thursday
13 June | 2024

Lahore, Pakistan

Economists suggest foreign investment to improve economy, say ‘big no’ to loans

Pakistan Institute of Development Economics (PIDE) hosts annual general meeting and conference of Pakistan Society of Development Economists at Bahauddin Zakariya University in Multan

Pakistan Institute of Development Economics (PIDE) Vice Chancellor Dr Nadeem ul Haque stressed the need for giving due attention to attracting foreign investment instead of getting loans to achieving sustainable growth of the national economy.

Addressing the inaugural session of a three-day annual general meeting and conference of the Pakistan Society of Development Economists at the Jinnah Auditorium of the Bahauddin Zakariya University in Multan. In collaboration with the Bahauddin Zakariya University, the Pakistan Institute of Development Economics (PIDE) hosted the meeting and the conference of the Pakistan Society of Development Economists.

Addressing the audience, Dr Nadeem ul Haque said that Pakistan’s economic system was on a ‘life support system’, and emphasized on exploring measures to tackle confronted challenges like the surge in the exchange rate of the rupee with other currencies, unemployment, and the aid-debt trap. He highlighted role of the Pakistan Society of Development Economists and the Pakistan Institute of Development Economics in asking questions and engaging in impactful research, stressing the need for a paradigm shift in thinking and importance of asking critical questions.

Regarding the economic and development plans, he pointed out the irony of having too many plans yet too little development. He said that the solution to the economic quagmire was not getting more debt, criticizing overreliance on loans, particularly from institutions like the International Monetary Fund. He said that Pakistan was in the perpetual cycle of aid-debt traps involving IMF, donors, consultants, and Transparency International. He questioned effectiveness of raising taxes and the lack of challenges to consultants in the development process.

Dr Nadeem ul Haque highlighted significant contributions of the late Mahbub ul Haq – renowned economist, international development theorist, and former Federal Minister of Finance – to the Pakistan Institute of Development Economics. On the occasion, Dr Iftikhar Ahmad reiterated the institute’s desire to initiate and collaborate on further research with researchers in South Punjab. In this year’s conference, he said that two-panel discussions were focused on South Punjab, featuring panelists from academia and regional centers.

Economists suggest foreign investment to improve Pakistan’s economy, say ‘big no’ to loans
A three-day annual general meeting and conference of Pakistan Society of Development Economists at Jinnah Auditorium of Bahauddin Zakariya University in Multan

The first-panel discussion of the conference was on foreign aid, moderated by Shahid Mahmood, a research fellow, former Economic Affairs Secretary Asad Hayauddin, Lead Country Economist for Pakistan at World Bank Tobias Haque, and Naveed Aziz, a senior governance advisor. The moderator said that since 1950, Pakistan received over 200 billion dollars in foreign aid, out of which. a significant chunk has been in the form of loans, and a large amount of aid has been tied aid. He said that the donor agencies influence major policy decisions; however, there was a dearth of cost-benefit analysis of the projects.

Asad Hayauddin said that it was unfortunate that foreign donor agencies had been helping set Pakistan’s development direction. He said that Pakistan’s two neighboring countries have also turned to the IMF, but they remained stuck to the plan to reverse the crises. Contrary to them, he said that Pakistan, on the other hand, deviates from the agreed-upon path after gaining some sense of stability following support from IMF and other donor agencies.

Tobias Haque said that there were numerous examples where countries went to the donors with a homegrown development plan and sought development agencies’ financial and technical assistance. Likewise, he said that Pakistan needed to develop a crisp indigenous development plan and then seek donors’ assistance. In such a case, the donors would have very little wiggle room to deny assistance on Pakistan’s terms, he said.

Naveed Aziz said that aid utilization had not necessarily been entirely negative in Pakistan, and aid dependence in some areas had come down as well. All panelists agreed that Pakistan needs to develop a long-term development plan with a clear indication of what support it requires from external sources and to what extent. Pakistan’s debt utilization stands as a major issue that has to be immediately improved, they said. “Pakistan needs to realize that aid is not a solution to problems, instead, it is just a tool to facilitate implementation of development plans and achieving the set goals.”

The co-hosts of the annual conference, organized by the Pakistan Institute of Development Economics, include Pakistan Poverty Alleviation Fund, the Bank of Punjab, the World Bank Group, UNICEF, RASTA, Saudi Pak Agricultural and Industrial Investment Company, and the School of Economics of the Bahauddin Zakariya University.

Latest