The Institute of Business Administration (IBA), Karachi organized a timely discussion on “The Current State of Pakistan’s Economy” by the Federal Minister for Finance and Revenue, Dr. Miftah Ismail. The discussion was moderated by the Executive Director IBA, Dr. S Akbar Zaidi. The event was attended by IBA faculty, students, external guests, and media, and a full-house ensued on campus.
Dr. Zaidi welcomed everyone to the event and invited Dr. Ismail to lead the discussion on Pakistan’s economy. Dr. Ismail has been a Visiting Faculty member in the past at the IBA and is familiar with the institution. His speech primarily focused on the current economic macroeconomic challenges of Pakistan, and the policies and strategies that have been adopted to face these challenges. He highlighted the most pressing issue facing the economy of Pakistan. These included the Current Account Deficit, unsustainable and non-inclusive growth, and the policy flaws that hinder the growth potential of Pakistan. Dr. Ismail further pointed out that going to the IMF was a hard political decision, but it was the last resort.
During his presentation, he also criticized some measures taken by previous governments which created challenges for the economy, pushing the country toward the brink of bankruptcy. He justified the IMF programme by stressing that it was only to save Pakistan that harsh measures were undertaken. He admitted that the inflation rate was the highest since the last four decades; and that his government understands how this has hurt the common man, but is hopeful that things will improve as he foresees electricity prices falling in the coming months.
He ended his presentation by talking about the damage in terms of life and infrastructure caused by the recent floods. He briefed the audience about how the government was redirecting funds from the Public Sector Development Programme (PSDP) towards relief efforts undertaken by the National Disaster Management Authority (NDMA).
At the end of the presentation, Dr. Ismail highlighted some areas that need immediate attention, including the need for improving agricultural productivity; improving the current account balance by restricting imports and increasing the export base; improving quality of education; and improving economic governance. He further commented that the motto of his government is to “live within our means”.
Following the discussion on macroeconomic challenges, Dr. Zaidi asked Dr. Ismail to elaborate more on the measures taken by the government to improve tax to GDP ratio, and how it is planning to curb the inflation rate. Commenting on this, Dr. Ismail noted that they are trying to impose ad valorem tax on traders, which will provide relief to the small traders. This will give the government margin to reduce taxes on personal incomes in the future.
This was followed by a very lively Q&A session in which faculty and students asked some hard-hitting questions, criticizing the government’s lack of focus on improving human productivity, climate change, and the contradiction in governments’ policies favoring certain sectors, such as real estate.
In the end, Dr. Ismail thanked IBA for providing an opportunity to present his views on the current state of Pakistan’s economy and noted the importance of such discussions to inform people of the steps taken towards fixing the economy.
