LAHORE—The Lahore School of Economics hosted its 17th annual conference on the Management of the Pakistan Economy on April 18-19, 2024, at the Burki campus in Lahore.
This event brought together prominent economists, policymakers, and academics to address the critical challenges facing Pakistan’s economy and to propose sustainable growth solutions.
The conference was inaugurated by Dr. Shahid Amjad Chaudhry, the Lahore School of Economics Rector, who emphasized the valuable insights derived from 17 research papers presented during the two-day forum.
Dr Moazam Mahmood, Seemab Sajjid, and Amna Noor Fatima presented evidence that the Pakistani economy will grow at 2.3% in FY 2024. However, this low growth and high inflation are expected to increase poverty significantly this year and in the coming years. The presenters recommended that approximately 10% of taxes be allocated to transfer funds to lower-income households to mitigate poverty, which is expected to grow over the coming years. Programs like the Benazir Income Support Program should be used to address poverty in Pakistan.
Dr Naved Hamid of the Lahore School of Economics and Dr Murtaza Syed of the Asian Infrastructure Investment Bank discussed how high-interest rates are necessary to combat inflation. They addressed common arguments against this and stated that even if inflation results from supply-side factors and government borrowing is less responsive to high-interest rates, one of the most critical ways to curtail inflation is still through interest rates. They also explained that the amount of the fiscal deficit and the level of international commodity prices will critically influence interest rate changes.
Dr. Rashid Amjad and Almazia Shahzad of the Lahore School discussed how the stop-go cycle of economic growth in Pakistan is caused by unsustainable fiscal deficits coupled with foreign borrowing. They proposed that the federal and provincial governments’ roles should be reversed to achieve growth and stabilization in Pakistan. The federal government should focus on meeting the external financing gap, accelerating economic reforms and managing the fiscal deficit, while the provinces should focus on generating growth and job creation. The presenters suggested that the provinces incorporate growth and job generation targets into their annual development plans and engage in public-private partnerships to increase productivity and growth.
Dr Azam Chaudhry, Gul Andaman, and Aymen Junaid discussed how stagnant exports were Pakistan’s most significant constraint. They presented a proposal for an export-led industrial policy, including policy prescriptions such as providing more credit to exporters, using Pakistan’s trade and investment officers to promote products, and reducing import tariffs on intermediate goods used by exporters. They also provided a template for identifying high-value-added export goods for future exports.
Dr. Mujtaba Piracha and Dr. Muhammad Irfan of the Government of Pakistan discussed Pakistan’s role in the World Trade Organization (WTO) and how the forum can benefit Pakistan’s macroeconomic situation. They explained how to use the WTO framework to stimulate investment and technology transfer from abroad to stimulate growth and how research and stakeholder engagement are essential to trade negotiations.
Dr. Theresa Chaudhry and Dr. Nida Jamil discussed the role of trade and trade policy on CO2 emissions in the Pakistani textile sector and the possibility of transitioning to renewable energy sources like solar energy.
