ISLAMABAD: The Economic Advisory Group (EAG) on Thursday highlighted economic openness and the need for key structural reforms including pricing revisions, improved vocational education, participating in regional trade blocs, and shifting industrial policy towards innovation.
These reforms encompass improvements in urban land utilization, simplification of tax regulations, and harmonization with the EAG’s vision for a more competitive and forward-moving economy.
A meeting was organized by the Economic Advisory Group (EAG) to deliberate on the recent revisions made to the Board of Investment Act.
Within the discussions, apprehensions were raised regarding the substantial authority vested in the Special Investment Facilitation Council (SIFC).
The EAG stated that unless the challenge of servicing external debt is directly addressed, Pakistan’s investment environment will remain vulnerable to the associated macro uncertainties. Notably, Pakistan’s external debt servicing burden, when measured against its dollar income, stands among the highest globally.
Recognising the need for swift policy decisions to address Pakistan’s current crisis, the EAG also asserts that measures diminishing competition and weakening contractual institutions will not attain the desired goals.
The EAG suggested a different plan for policymakers to follow, with the goal of promoting the nation’s future prosperity.
The EAG suggests a way forward that combines restructuring external debt to tackle immediate liquidity challenges and implementing structural reforms to boost Pakistan’s productivity and competitiveness.
During discussions, the EAG raised concerns about the SIFC’s discretionary authority to provide incentives and relax regulations for specific projects. Predictability is vital for long-term investments. The SIFC’s power to grant better incentives to competitors heightens investment risks, contrary to established research that links higher risk with decreased investment.