Reforms, revenue, employment generation vital for economic turnaround: Experts

ISLAMABAD: Financial and revenue experts Tuesday called for long-term reforms and the need for exploiting massive potential of the youth to turn around the economy and to fulfill the election pledge of Pakistan Tehreek-e-Insaf (PTI) to provide jobs.

PTI, which inherited a shattered economy, has made a smart move by planning to “create jobs through housing which mostly accommodates informal economy and is estimated to be roughly the same size as that of the formal economy,” said project consultant Moeen Abbas.

He was commenting on the mood of expectancy in Pakistani youth who constituted 63 per cent of its over 200 million population.

The economic wizards agree that raft of steps will be required to arrest the economic rot. Nizamuddin, a financial expert and a graduate from London School of Economics (LSE) said “before we think of attracting foreign investment, we need to stem the outflow of domestic funds or at least look at the reasons for such transfers and address the concerns of the domestic investors. By one estimate over 15$ billion were sent abroad through normal banking channels during financial year 2016-17 alone.”

Nizam said when domestic investors had such a poor view of local economic conditions and investment opportunities, “attracting foreign investors becomes an arduous task, least because many foreign investors work in partnership with their local counterparts”.

He called for institutional reforms to strengthen the capacity of the public sector in creating a business friendly environment for investors.

Will Imran deliver where his predecessors, with far more experience failed ? is the question taxing many minds. Or will he tread the path others were afraid to; curb corruption, banish poverty, and bring more people into the tax net by getting tough on the privileged.

“There are very few countries in the world that are blessed with a youth bulge. This is an unparalleled opportunity but if untapped, this may pose a serious threat to the country,” said Moeen, adding Imran can deliver where others failed.

Imran’s 22- year struggle, mostly spent in political wilderness with his repeated refusals to enter the corridors of power at the offer of dictators, is the tale of star cricketer- turn politician who has incredible faith in himself to turn the tables on his rivals. His biggest challenge now comes from the dire straits of the country’s economy and measuring up to the hopes of the youth.

“The biggest ray of hope is that Imran Khan’s regime has realized the importance of multiplying job creation to accommodate the youth. However at the moment, creation of 10 million jobs a year seems far- fetched unless fundamental social and economic changes are materialized,” said Moeen.

When questioned on more revenue generation a very senior retired official of the Federal Bureau of Revenue (FBR) Juneid Akram called for structural changes rather than opting for short term measures.

“The tax machinery besides being corrupt to the core is incompetent and authoritative. A large sector of the economy remains out of the tax net. The new government would do well to restructure the entire system and adopt a consistent equitable tax policy favouring industrial and agricultural sectors in particular,” he said.

The optimum collection of revenues is a colossal challenge for the new government which is further compounded by the need for immediate enhancement in revenues to meet the difficulties at hand, added the Juneid.

He said the tax policies are heavily tilted against the common man and favour the rich. “These favour traders as opposed to industries. Registration and licensing for setting up industries is equal to a hurdles race.”

Juneid said manufacturing yielded more jobs and long term growth than mere trade which heavily relied on imports. Indirect taxes and taxes on consumption such as petroleum products hurt the poor.

A vice president of a commercial bank in Lahore requesting anonymity said “Imran Khan’s policy to create employment opportunities by engaging and incentivizing the private sector by lowering input costs, providing tax incentives and to target sectors that are job-intensive like small and medium enterprises, construction, agricultural development and tourism and social services (education and health), gives us hope of light,” she said.

There was a time when he would come charging onto the crease to rip apart the wicket of a batsman in front of him, and an uproar would rent the air in anticipation. It remains to be seen whether Khan can surmount the deeply embedded institutional and economic challenges facing him as he comes into office. Despite facing the toughest ever opposition and a shattered economy, even his detractors will agree that giving -up is not in Imran’s nature.