LAHORE: The Institute for Policy Reforms (IPR) has offered a reforms plan to enable Pakistan’s economy to catch up with the prosperous Western countries. A comprehensive report issued on Monday sets forth a practical plan of action for achieving rapid economic growth. “Examples of other countries show that this can be done,” it said.
The report suggested that Pakistan must increase the government revenue to enable it to provide public goods and to reduce external borrowing. “Steps are needed to increase domestic savings. High growth economies consistently invest over 25% of their GDPs, including 7% on infrastructure. They spend another 8% on health and education,” it said.
Pakistan too must aim for investment of at least 25% from the present 15% of the GDP. It must increase the share in the GDP of export-oriented manufactures and become part of the global value chain, the report said.
Public investment must focus on high priority projects in the areas of power supply, transmission/ distribution, and water storage and efficiency. It must also strengthen agriculture research and extension services. Investment in skills and education must increase.
Urban centres are important drivers of growth. To promote economic activity, they must have reliable power, gas and water supply, mass transit systems, as well as high class Wi-Fi.
Air and sea/ dry ports must be of world standards. Favourable industrial policy will increase value-added exports. The government must aid with tax incentives, low cost credit, R&D support, dedicated infrastructure, and training of workers.
Special Economic Zones (SEZs), being set up under the China-Pakistan Economic Corridor (CPEC) should connect with domestic and international markets.
An export-oriented trade policy would stabilise the external account. Of special importance are transit trade and border facilitation. The tariff structure must support export-led growth, the report added.
