ISLAMABAD: As part of the Distinguished Lecture Series, Dr Ishrat Hussain, Ex-Governor State Bank of Pakistan, delivered a keynote address at Islamabad Policy Research Institute on Tuesday, and expressively called for expediting and institutionalizing reforms. He advocated recalibrating the existing system, and called for eliminating the bottlenecks through a well-laid out plan that are proactive and go on to restructure the state-centric edifice.
The world-fame economist who had served the World Bank, and had been an adviser to former prime minister Imran Khan, however, regretted that his proposed package of reforms to the PTI government could not see the light of the day, apparently owing to political exigency, as the elected coterie had second thoughts over it. He said the fact that corruption and nepotism have ranted socio-economic growth, and the redundant civil structure cadre had added miseries to it.
He said that Rs 1trillion loss is owing to liabilities in the financial sector, as well as unpaid loans. He, nonetheless, pointed out that after privatization of banks, these same loss generating units are contributing Rs200 billion per annum profit to the exchequer.
He also criticized that government intrudes into the private sector, which has negated its growth in economic indices. He also pointed out the flawed taxation sector, wherein only those under the tax net are fleeced and burdened every year, and there is no success in widening the tax base.
He advocated restructuring of state units and policy reforms so that it could lower transaction costs, minimize cronies and improve the governance pattern.
While calling for digitalizing of the economy, he specified that it will lead to easing of governmental role and buoy productivity and restore the confidence of the masses and businesses in the state. He said that 44 percent of transactions are still in cash, which leads to black economy.
Dr Hussain said recalibration of the governance structure should aim at delivering the core functions of the state i.e., provision of basic services – education, health, water sanitation and security – to common citizens in an effective and efficient manner and to promote inclusive markets through which all citizens have equal opportunities to participate in the economy.
The restructuring should lower transaction costs and provide access without frictions by curtailing arbitrary exercise of discretionary powers, reducing over-taxation, minimizing corruption, cronyism and collusion and ensuring public order and security of life and property.
He said the point to begin this process is the strengthening of the political and electoral system that moves away from dynastic and elite capture to a broad based system where the educated middle class individuals of caliber and competence can be attracted to take part in politics.
Intra party elections from the grass-roots level to the national level would open the doors, he observed.
Despite the pursuit of policies of liberalization, deregulation, de-licencing and disinvestment during the last 15 years, the overbearing burden of government interventions in business life cycle looms large, he remarked.