Effective implementation of bold and ambitious reforms is imperative to usher in the country’s new era of development and prosperity. The accomplishment of this goal, however, is contingent upon addressing critical underlying institutional, governance, and structural constraints. Dr. Shamshad Akhtar, Caretaker Federal Minister for Finance, Revenue & Economic Affairs, made these remarks during her keynote address at the national seminar on “Pakistan’s Economic Crisis: Challenges and the Way Forward,” organized by NUST Institute of Policy Studies (NIPS) at the university’s main campus.
Dr Shamshad Akhtar highlighted five key areas that have increased the vulnerability of Pakistan’s economy to domestic and global shocks: first, unsustainable fiscal policy due to revenue gaps and unproductive expenditure; second, fiscal unsustainability has enhanced government recourse to public debt, which has increased; third, climate shocks as the global warming model predicts that Pakistan’s weather patterns would become even more volatile and extreme in the decades ahead, with an average increase in temperatures by 1.3% to 4.9% by 2090; fourth, the lack of innovation and diversity in the structure of the economy; and fifth, the failure to integrate Pakistan’s economy with the rest of the world.
Dr Shamshad further stressed five critical areas of reforms essential to reducing Pakistan’s vulnerabilities and fostering sustainable growth that included a comprehensive overhaul of the government’s fiscal apparatus necessary to lower the revenue-expenditure gap, addressing structural weaknesses of SOEs and improve their efficiency and functioning, reducing the debt burden; and enhancing competitiveness and encouraging new investments.
During his talk in the second session of the seminar, Mr Muhammad Ali, the Caretaker Federal Minister of Energy, Power & Petroleum, talked about the energy crisis and energy sector reforms in Pakistan. The minister recognized the interlinked nature of Pakistan’s power and energy challenges and emphasized the need for comprehensive structural reforms. Economic activity has collapsed due to import controls, creditworthiness downgrades, and ballooning interest payments. He said that a strategic approach is needed to meet the country’s energy requirements as Pakistan relies heavily on gas and oil as primary energy sources. At the same time, industries and transport consume the most significant chunk of the energy produced.
Moderated by Dr Ashfaque Hasan Khan, Director General NIPS, the event attracted diverse participation comprising senior policymakers, dignitaries, government officials, veteran diplomats, development professionals, economic experts, academics, think tank leaders, scholars, and students. Lt Gen (Retd) Javed Mahmood Bukhari, Rector NUST, also attended the seminar.
Dr Ashfaque also presented a comprehensive overview of Pakistan’s economic crisis. His insightful lecture provided a broad analysis for addressing the economic challenges developing countries, like Pakistan, face in managing their debt burdens.
Dr. Khan emphasized the reduction in interest rates to reduce expenditure and bring the budget into sustainable balance.
Other distinguished speakers included Mr. Sakib Sherani, CEO of Macro Economic Insights, Prof Ather Maqsood from NUST, and Dr. Muhammad Khan from IIUI, who articulated key points bearing on good governance, political stability, consistent growth policies, innovation promotion, energy infrastructural overhaul, sustainable economic development, tax reforms, dialogue as a way out of political and decision-making deadlocks, resource indigenization, reform of energy pricing, and the restoration of investor confidence.
