Charter of economy

Economic charter 

Now that the country's political climate has somewhat subsided; To concentrate on the economy, some medium- and long-term measures must be considered.

The PDM government has repeatedly stressed the need to develop a national cross-party economy charter. Even if the government does not have the support of the current opposition, it would be beneficial if it presented its version of the Charter of Economy by February or March 2023. It will put pressure on the opposition to join the negotiations or release its version, potentially leading to a joint consensus document that will serve as a guide for the country's economic policy and implementation.

In these pages, I had previously written about PIDE's attempt to create the Charter of Economy. Today, I want to talk about Dr. Hafiz Pasha's extensive Charter of Economy, which was written toward the end of 2021. The document by Dr. Pasha is made up of 11 sections that are divided into 31 chapters. These sections include economic goals for the years 2024 and 2025, improving governance, strengthening the federation, mobilizing resources, increasing investment, improving the balance of payments, accelerating economic growth, striving for balanced regional development, focusing on human development, expanding employment opportunities, and increasing efforts to alleviate poverty and provide social protection.

You might feel as though you are reading a wish list if you only glance at the Charter of Economy briefly; However, it is essential to possess a broader perspective and then establish connections between the country's economic, social, and political developments. Since 1988 and onward, Pakistan has followed the doctrine of perpetual political instability. If, in the near future, all political parties could reach an agreement on the larger economic contours; As stipulated in the 2006 Charter of Democracy signed by the PML-N and PPP, they must also agree not to destabilize each other's governments and abide by certain rules to provide political space for all political parties to make difficult political and economic decisions that would alter the country's economic trajectory.

In the limited space, it is difficult to accurately represent Dr. Pasha's extensive document. However, a few important takeaways are discussed. Some of Pakistan's economic goals for the years 2024 and 25 include a GDP growth rate of 6.0%, an increase in revenue collection to 18.4% of GDP, $24.8 billion in foreign exchange reserves, and import cover for 3.6 months.

Parliamentary committees must be the first point of contact for all legislation and ministry accountability in order to improve governance. The economic information system's architecture must be improved. The State Bank must limit the amount of domestic bank borrowing. The federal government and the provinces ought to share the cost of vertical federal programs connected to Federal Legislative List II. The NFC awards' poverty/backwardness criteria ought to be determined by the actual number of poor people, not by the percentage of people living in poverty. The country ought to have a two-tiered system of local government, with the top tier providing services and collecting revenue and the bottom tier ensuring participation and accountability.

Regarding the other recommendations, slabs should be reduced from 12 to 6 for a more progressive personal income tax. The exemption from long-term capital gains on shares and property ought to be eliminated. The Ministry of Finance's Triage report suggests privatizing state-owned businesses; However, it ought to be accomplished by omitting the gas and electricity companies from the list. The role of public-private partnership in infrastructure projects must be examined using examples from other nations.

The nation must urgently increase exports and reduce imports. The Free Trade Agreement with China is one place to look for export data. At the moment, China exports to Pakistan six times as much as it does to China. The volume of exports must be increased. Services ought to be subject to import tariffs. Cotton ought to have a support price, but sugarcane ought to have it removed. Small dam and hydel project completion should be encouraged with higher development allocations. The private sector should receive financial incentives for the development of improved seed varieties.

Small and medium-sized businesses, or SMEs, account for 25% of manufactured exports and employ 6.2 million people in the nation. However, these SMEs receive only 2.4% of all private sector credit, which is extremely low. SMEs' productivity necessitates an urgent and prudent increase in the percentage of private sector credit they receive.

The extraction of energy from renewable natural resources ought to be the primary focus. In rural areas, girls' access to schools must be expanded. By 2024 and 2025, education spending should rise to 2.5% of GDP on an annual basis. The immunization of children requires the implementation of a conditional cash transfer program. In rural areas, lady health workers are referred to as "barefoot doctors." With appropriate training, compensation, and work status, their coverage should increase.

The "youth bulge" in employment must be filled urgently. The provincial labor departments lack strength. A system for district labor officers must be established. The Planning Commission's role needs to be expanded, and provincial planning departments should play a significant role in the planning process. The social protection programs must be expanded. Provincial expenditures for population control must rise from 0.5% to at least 3.0%, and advocacy for population control should involve important societal stakeholders and opinion leaders.

These are just a few highlights from the entire report. There is sufficient material available. All that is required of the government and other political parties outside of it is to mobilize their thought leaders, economic advisors, and associates in think tanks and begin developing a blueprint for a Charter of Economy for the next 20 years that has the broad support of all political parties and has short, medium, and long-term goals. This Charter of Economy must be adhered to by all stakeholders who operate the system or are likely to operate the government in the next 20 years, regardless of who is in charge. There is a way where there is a will.