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PIDE unveils groundbreaking reform manifesto to revitalize Pakistan’s economy 

PIDE unveils groundbreaking reform manifesto to revitalize Pakistan’s economy 

PIDE unveils groundbreaking reform manifesto to revitalize Pakistan’s economy 

PIDE unveils groundbreaking reform manifesto to revitalize Pakistan’s economy 

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ISLAMABAD, January 22, 2024: The Pakistan Institute of Development Economics (PIDE) has unveiled a game-changing report named the “PIDE Reform Manifesto” at the Marriot Hotel in Islamabad. Based on the research done by the Institute in the last four years, and the various conferences, seminars and consultative meetings, this manifesto is not just a document; it is a visionary roadmap poised to revolutionize both the economic landscape and societal fabric of Pakistan. Delving into the core imperative of implementing substantial reforms, the manifesto is a compelling call to action for a brighter future, shaping a narrative of progress and transformation in the heart of Islamabad. PIDE’s commitment to driving positive change is vividly reflected in this pioneering initiative, offering a strategic guide for policymakers and stakeholders to navigate the complexities and usher in a new era of prosperity for Pakistan.

As the chief guest of the ceremony, Caretaker Federal Minister of Information, Murtaza Solangi, announced that the upcoming elections would take place on Thursday, February 8, 2024. Minister Solangi reassured the public that all assumptions and rumors surrounding the elections had been addressed, creating an environment of transparency and credibility in the electoral process.

Emphasizing the significance of the election manifesto, Minister Solangi highlighted crucial issues such as the economy, foreign policy, education, and health. He stressed the importance of open discourse on fundamental issues and urged an increased collective consciousness among the people. Addressing challenges like population growth, he underscored the necessity of controlling the demographic surge.

Minister Solangi also called for democratic attitudes within political parties, asserting that fostering such values is pivotal for the country’s progress. With a hopeful tone, he expressed confidence that these collective efforts would lead to solutions for the real problems facing the nation.

In his opening remarks Dr. Nadeem ul Haque, Vice Chancellor Pakistan Institute of Development Economics (PIDE), said that the economic challenges facing Pakistan persist despite 24 IMF programs, leaving the nation on the brink of default and trapped in a cycle of current account and fiscal deficits. Excessive government regulation, particularly from a bureaucratic system inherited from colonial times, hampers the formal market, with the government’s interference estimated at 64% of the economy. Additionally, a regulatory cost of up to 45% of GDP further restricts investment opportunities. The democratic system, rooted in colonial-era ideologies, contributes to unsustainable debt levels and a patronage-driven political landscape, confusing local and national priorities. Antiquated institutions, resistant to reform, repel talent and hinder adaptation to the modern global economic environment, leading to a continuous cycle of crises.

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Despite these challenges, hope lies in Pakistan‘s youthful population, yearning for change. Dr. Haque’s proposed deep reforms advocate for a complete overhaul of governance structures, including the bureaucracy, judiciary, and democratic systems, to harness the potential of the 21st century. This transformative vision emphasizes the need for markets to function efficiently, talent to be nurtured, and the country to evolve with the times. However, resistance from entrenched colonial structures and a lack of policy and reform capacity perpetuate the crisis narrative. The call to action implores political parties, media, and civil society to engage in discussions surrounding these reforms, recognizing that a continuous process of learning and evolution is essential for Pakistan to break free from its inherited colonial system and navigate towards sustained growth.

Dr. Durre Nayab, Pro Vice Chancellor PIDE, highlighted the critical challenges facing Pakistan, emphasizing that addressing the changing demography and managing the escalating debt burden requires sustained and elevated economic growth. According to PIDE estimates, the demographic bulge is projected to persist until 2056, necessitating the addition of over two million new jobs annually for the next thirty years. Dr. Nayab stressed that achieving and maintaining an economic growth rate well above 7% annually is imperative to meet this demand. Drawing attention to India’s successful track record of consistent growth over the past two decades, she underscored the feasibility of such ambitious goals. PIDE’s research indicates that a comprehensive strategy of deep reforms is essential for fostering the necessary growth. Dr. Nayab also expressed concern over declining productivity, particularly in export and subsidy-seeking sectors, urging concerted efforts to reverse this trend for sustained economic prosperity.

In a candid statement, Dr. Ahmed Waqar Qasim, Senior Research Economist PIDE, highlighted the significant challenges posed by Pakistan’s civil bureaucracy, operating within a system devised during colonial times. Emphasizing the outdated nature of bureaucratic structures and policy processes, he expressed concern over their incapacity to effectively address the complexities of the modern world.

Dr. Qasim further highlighted the bureaucratic hurdles impeding growth, innovation, and development. Unnecessary regulatory burdens, dead capital, and policy control hinder progress, creating a management system resistant to professionalization and modernization. He criticized the outdated human resource management system, which prioritizes seniority over achievements and performance, maintaining archaic training and payment structures. The colonial practice of tying positions to material perks like houses, cars, and plots lacks incentives for performance, resulting in a talent drain from the public sector. Dr. Qasim called for urgent reforms to align the management system with the needs of the 21st century, emphasizing merit-based evaluations and dismantling the antiquated practices hindering genuine talent from contributing effectively to the public sector.

The PIDE Team conveyed crucial insights. In a stark depiction of Pakistan’s economic challenges, a recent report underscores the nation’s ongoing struggle to stabilize its economy, despite undergoing 24 International Monetary Fund (IMF) programs. The document highlights a troubling investment climate characterized by excessive and unwise government regulation, which has effectively hampered the formal market and elevated the informal sector as the primary source of economic opportunities.

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Addressing the historical backdrop, the manifesto delves into the persistent colonial-era bureaucracy, estimating that government interference encompasses nearly 64% of the economy. This bureaucratic overreach, combined with a regulatory cost equivalent to 45% of the GDP, has proven detrimental to investment and overall economic growth.

The report also sheds light on Pakistan’s political system, which has evolved around patronage rather than ideology. This approach not only results in unsustainable debt levels but also muddles local politics with national agendas, further complicating governance and public investment.

Highlighting the negative impact of the current governance structure on talent retention, the manifesto emphasizes the loss of innovative and entrepreneurial skills to foreign shores. It argues that international aid and lending institutions have exacerbated the issue by treating Pakistan as a modernized economy, thereby impeding organic thought and research.

In presenting a vision for the future, the manifesto advocates for a comprehensive overhaul of the governance system, including reforms to the bureaucracy, judiciary, and democratic structures. The goal is to create an environment conducive to nurturing talent and enabling markets to function more effectively, leveraging the potential of Pakistan’s youthful demographic.

Looking ahead, the Manifesto calls for a radical reevaluation of policy-making, governance, and business practices, stressing the necessity for a continuous process of reform, driven by learning and evolution, to address the deep-rooted social and economic problems facing Pakistan.

The report concludes by encouraging political parties, the media, and civil society to actively engage in discussions surrounding these proposed reforms. It underscores the importance of embracing change as a societal norm to pave the way for a more prosperous and sustainable future for Pakistan.

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The event served as a convergence point for a diverse array of stakeholders, bringing together policymakers, practitioners, professionals, the business community, private-sector investors, analysts, academics, researchers, policy experts, and youth representatives.

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