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Experts Suggest Sustained Action to Avert Implications of Global Economic Recession

Experts at an intellectual discourse enunciated multiple crises faced by the country and suggested a sustained action amid international economic recession to avert its serious implications affecting the in-house drivers of financial instability.

Speaking at a Roundtable titled: “Addressing Pakistan’s Inflation Woes,” at the 26th Sustainable Development Conference organized by Sustainable Development Policy Institute (SDPI), Dr Waqar Masood Khan, Advisor to Prime Minister on Finance, said that the inflationary situation started with the Ukraine war as the price of oil and other commodities skyrocketed, and Pakistan cannot be singled out in this respect. Normally our inflation stood at around 6 percent to 7 percent but during the past few years, it reached unprecedented levels, which should be debated, he said, adding that the middleman’s control has an exponential impact on inflation because there is a big difference between wholesale market and the retail market.

Ali Rehman from Prime Institute said inflation has remained primary concern of successive governments in Pakistan. He said policy and administrative measures to control inflation have proved counterproductive.

Hiba Zaidi from International Finance Corporation said in each sector, including food and petroleum, there are different reasons for high cost or inflation. She said with regards to food prices there are structural issues along with dysfunctional markets as there are about 50 per cent losses of perishables from farm to market.

Dr Aliya Hashmi Khan from Quaid-i-Azam University focused on monetary policy issues, saying that decision making is very important to control the inflationary trends.

Saud Bangash, a representative of Pakistan Business Council, said: “Our issue is primarily economic management while the issue of our economy is structural in nature.”

Speaking at the final plenary titled: ‘Pathway to Recovery, Hope and Resilience’, Dr Jehanzeb Khan, the Special Assistant to Pime Minister (SAPM) and Deputy Chairman of Planning Commission, has said that in recent past, the caretaker government was able to mend things to a certain success which reflects the importance of an effective administration but now our problems are so huge and complicated that a sustained action is imperative to control the situation.

Regarding the standby arrangement with the IMF, the SAPM said, “We are fulfilling our commitments that have also helped in stabilizing some of the indicators that means we can do it.” He said the first thing that needs to be done and efforts are on to do it, is to bring the provinces to a consensus in the Economic Coordination Committee of the government. The provinces are equal partners in it, he said, emphasizing the need to make National Security Council more active.

Former Governor of the State Bank Dr Ishrat Hussain said development patterns in Pakistan, India and Bangladesh are based on solid evidence. Recollecting the critical success factors, he told the audience how these countries could continue their “Pathway to Recovery, Hope and Resilience.” He said he didn’t believe in growth for the sake of growth, but “we all should aspire to have sustained, sustainable, and inclusive growth where we care for the planet, and the prosperity of the majority population.”

SDPI Executive Director Dr Abid Qaiyum Suleri said Pakistan, since July 2023, has been facing severe economic challenges with the risk of default taking center stage. Referring to Ukraine war and the Middle East conflicts, he said, these conflicts have challenged the world peace involving two nuclear powers. About climate change, he said global warming has now turned into global boiling and with increasing temperature, the livelihood options for masses are freezing; therefore, we have to think out of the box.

He said a great debate is going on in technical circles whether the use of artificial intelligence should be regulated or let it go unabated because technology would evolve its own solutions. Referring to the theme of this year’s conference, Suleri said the basic idea behind the conference – “Light at the end of the Tunnel” – was to give hope to the depressed Pakistani society.

Speaking at a thematic session titled: “Rethinking Public Debt Assessment with SGDs Lens: Pakistan in Focus” at the Conference organized by SDPI in collaboration with Friedrich-Ebert-Stiftung (FES) and United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), Dr Hamza Ali Malik, Director, Macroeconomic Policy and Financing for Development, UNESCAP, Thailand, has said the management of fiscal policies and debt has emerged as a pressing policy challenge for the countries like Pakistan, and if managed properly, it can lead to sustainable growth.

Dr Malik said for future debt investments that aim to fuel Sustainable Development Goals (SDGs) and national financial stability, robust structural development policies are deemed indispensable.

Dr Mohsin Hassan from the Ministry of Finance said last year our GDP growth was 0.3 per cent while inflation remained at nearly 30 per cent. To maintain out balance of payment, we need external financing at a cheaper rate, he said, adding that domestic interest rate needs to be lowered as well.

Ali Kemal from SGDs Task Force said if we maintain debt to GDP ratio at 60 percent then the debt in real and nominal terms will be four times more than it was in 2000. “We need to ensure sustainability and make optimum use of the external loans,” he said, adding that “we also need huge resources to meet SGDs targets.

At another panel titled: “Sustainability in the Digital Age: Potential of AI in Pakistan”, experts said that tapping the potential of Artificial Intelligence (AI) can bring significant foreign direct investment (FDI) into Pakistan and boost employment, but it requires long-term regulatory policies.

Major-General Hafeez-ur-Rehman (retired), Chairman of Pakistan Telecommunication Authority (PTA), said that creating an AI ecosystem in Pakistan is crucial for which regulatory policies must be developed in consultation with experts.

Brigadier Muhammad Yasin (retired), the SDPI Senior Advisor Emeritus, highlighted the vast potential and capabilities that AI is driving in sustainable development, transforming the health, industry, education, agriculture, defense and human resources. He also warned of the job displacement that AI has caused and may cause in the future.

Waqas Burney from Product Partnerships at Google PAC, via video-link from Singapore, highlighted that AI can both predict natural disasters and analyze the damage inflicted. With AI, riverine floods can be predicted 7-days earlier, he said, adding that “Google Map” for floods is now available in over 80 countries as open-source software

Tahir Ahmed Masood from Transworld Associates remarked that governance and regulatory delays for AI results in disruption. Generative AI offers customized learning experiences, allowing students to focus more on challenging concepts.

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