Page 14 - CMA Journal (Mar-Apr 2023)

Exclusive Interview

changes will have to be made in the level and
composition of allocations of public expenditure to
The energy sector of Pakistan has education and health.
ICMA: Does Pakistan consistently require support
emerged as a ‘black hole’ in the
from IMF?
economy. Fundamental steps will Dr. Hafiz A. Pasha: Pakistan has been a country which is
notorious for its very frequent resort to IMF Programs.
have to be taken to reduce the Since 1988, Pakistan has been in 23 programs, but has
very high transmission successfully completed only one program. It is hoped
that when Pakistan goes shortly for its 24th program with
distribution and billing losses of the IMF, spread over the next three years, a
comprehensive and strong set of reforms will be
over 23%, while moving towards implemented such that the country then finally embarks

renewable energy on the path of self-reliant, sustainable, and relatively
rapid growth.
ICMA: What other avenues can Pakistan explore
instead of depending on the IMF?
This is accompanied by a short-run increase in the rate of
Dr. Hafiz A. Pasha: The SIFC has set a very ambitious
inflation and some slowdown in the growth process in
target of attracting foreign direct investment into
the process of stabilization.
Pakistan to solve the balance of payments problem
ICMA: How can Pakistan navigate IMF conditions
while protecting its economic interest and priorities?
Dr. Hafiz A. Pasha: The process of stabilization is likely to
accompanied by rise in the level of unemployment and Foreign direct investment is likely
the incidence of poverty. Therefore, a program of social
protection and relief for the poor will need to be to increase only after the
simultaneously put in place.
economy has stabilized. There will
ICMA: Are there specific sectors or areas where you
believe Pakistan should concentrate its efforts to simultaneously also be a need for
enhance stability and secure a more stable future?
political stability to stimulate
Dr. Hafiz A. Pasha: The first priority is for raising the level
of exports, through appropriate steps to increase both domestic and foreign
competitiveness and achieve greater diversification. Next
in importance is significantly enhancing the tax-to-GDP investment in the country
ratio, which has fallen in recent years. This requires the
implementation of progressive tax reforms, leading to
more effective taxation of sectors like real estate, and accelerate the process of growth. However, since
wholesale and retail trade, and agriculture. its formation there has been no upsurge yet in this
inflow. There is, in fact, no substitution to
Further, there is need for rationalization of federal current
implementation of a comprehensive agenda of
expenditure, focusing especially on reduction in costs of
reforms to stabilize the economy, preferably under the
running the civil administration, subsidies, grants and
umbrella of an IMF Program. Foreign direct investment
pensions.
is likely to increase only after the economy has
Also, the energy sector of Pakistan has emerged as a stabilized. There will simultaneously also be a need for
‘black hole’ in the economy. Fundamental steps will have political stability to stimulate both domestic and
to be taken to reduce the very high transmission foreign investment in the country.
distribution and billing losses of over 23%, while moving
The Editorial Board thanks Former Federal Minister for Finance and
towards renewable energy.
Professor Emeritus Beaconhouse National University (BNU) Lahore
The level of human development of Pakistan has also for sparing from his precious time to give exclusive interview for
now fallen from the medium to the low level. Appropriate Chartered Management Accountant Journal.

12 ICMA’s Chartered Management Accountant, Mar-Apr 2024