Speakers for deregulation of various sectors for higher economic growth – Business and finance

ISLAMABAD: Speakers at the conference called for deregulation of various sectors of the economy, saying that regulations have resulted in stunted economic growth. Debating on the economic challenges facing the country on the last day of the conference titled ‘EconFest’ organized by the Pakistan Institute of Development Economics (PIDE), on Sunday, experts cited PIDE sludge audit reports that identify excessive regulation as a barrier to GDP economic growth, stated that urgent deregulation is a must to stimulate economic growth.

They highlighted how Pakistan’s 122 federal regulators impose unnecessary licenses, excessive tax burdens and unnecessary requirements that hamper business activities and deter investment. Speakers called for the removal of these obstacles, advocating for modernized regulations that make it easier rather than harder to do business, thereby increasing economic productivity and building investor confidence.

At EconFest 2024, another panel noted that the original vision of Islamabad as a “garden city” has faded, with a noticeable decline in the number of gardens and public spaces. They stressed that urban regeneration is crucial for all Pakistani cities and must be carried out in accordance with appropriate rules and regulations, which should be publicized. The panel also emphasized that political will is essential for successful urban regeneration, as politicians play a key role in urban development. Additionally, they pointed out that unlike many foreign cities, Pakistani cities lack efficient public transport systems, which are essential for urban revitalization.

At EconFest 2024, experts discussed the future of Pakistan’s bureaucracy, focusing on making it more efficient and affordable. Hamza Haroon emphasized reducing bureaucratic roles in city management, aligning incentives with economic performance, and promoting competition in the civil services.

Namra Awais emphasized the colonial roots of the current system and advocated reducing and modernizing the bureaucracy to better suit Pakistan’s complex society. She noted inefficiencies in the hiring and skills of officers in grades 1-16 and the lack of job descriptions for officers in grades 17-22. Rana Muhammad referred to leaks in the pension system and emphasized the need to reconcile professional duties with benefits. The speakers agreed on the need to monetize non-monetary benefits, but noted that, above all, remuneration must be competitive.

Mukarram Ansari stressed that while the role of regulators around the world is to facilitate business, in Pakistan they often create obstacles in the form of unnecessary licenses and excessive tax burdens, which hamper the development of businesses. He stressed that resistance to reforms such as those undertaken by the Federal Board of Revenue (FBR) is exacerbating the issue. Ansari stressed that deregulation does not mean eliminating all regulations, but rather removing unnecessary ones that hinder business activities, citing India’s “End of License Raj” law as a successful example. He cited an example where an oil importer in Pakistan had to obtain permits from two authorities to perform the same laboratory test, illustrating unnecessary regulatory requirements.

Ahmad Waqar Qasim, the second speaker, explained that Pakistan’s regulatory burden, referred to by PIDE as RLCO (Registration, License, Certification and Other Obstacles), significantly hinders GDP growth.

He noted that the cost of regulation in Pakistan is disproportionately high in an environment where government ownership is 65%. Qasim stressed that the local perspective is often ignored in favor of directives on foreign aid, and that academia does not engage in debates on deregulation. He argued that regulations should be based on established principles and not on ad hoc obstacles as is the case in other market economies. A lack of regulatory impact assessment and outdated regulatory frameworks such as the Companies Act 1890 further hinder economic progress. The session ended with a call to modernize regulations that will make it easier to conduct business and enhance economic growth.

The “Government Revisited” session focused on the cost of living for government officials and the justification for new employee spending.

Moin ul Haque highlighted the repeated failures of civil service reforms in Pakistan, stressing that effective reforms should identify weaknesses and promote good governance.

He compared the Pakistani system to the merit-based civil service in other countries, which ensures competence and accountability. Nargis Sethi stressed the need to re-evaluate government jobs, suggesting that technological advances should lead to fewer government jobs. She emphasized that the public sector is grappling with responsibility as the population grows, so it is critical to promote the private sector and discourage overreliance on government positions.

Moin ul Haque dispelled the misconception that the foreign ministry is over-involved abroad, explaining that 70% of its staff are engaged in core functions such as economics and policy-making. He advocated centralized systems of education and accountability based on merit, with fixed terms of office. Nargis Sethi also highlighted the significant challenge of implementing the identified reforms. The session concluded with concerns about political promises to increase government jobs and how to balance this with the need to reduce such jobs to ensure a leaner and more efficient public sector.

During a fascinating session at EconFest 2024, experts discussed the challenges related to media and image building, with particular emphasis on the limited reach of business reports. Faseeh pointed out that in the five hourly segments typically allocated to news programs, business reports rarely receive attention. He emphasized that the media lack motivation to create business-related content due to traditionally low viewership.

Mehtab, addressing the issue from a journalist’s perspective, admitted that there are difficulties in creating content that attracts public attention. He argued that while business content is crucial, politics also plays a vital role in people’s lives and naturally attracts more attention. According to Mehtab, politics should be widely discussed because it has a direct impact on people’s lives and is in line with what the audience wants to hear.

The session highlighted the need for an innovative approach to engaging the public with business content, balancing it with political discourse to ensure comprehensive news coverage.

PIDE’s EconFest continues to be a key event celebrating and promoting innovative ideas and independent thinking in economics and politics.

Various organizations collaborated with PIDE during the 3rd Economic Festival including Bank of Punjab, Atlas Honda, LUMS, National Defense University, Pir Mehr Ali Shah ARID Agricultural University, Rawalpindi Women’s University, The Urban Unit, Chaudhry Nazar Muhammad Department of Economics, National University Modern Languages, SECP, IM Sciences, Riphah International University, SZABIST, The Millennium Universal College, Oxford University Press, Books, Paramount Books and Metropolitan Corporation Islamabad.