Tax reforms necessary for inclusive growth

Islamabad: Given the post-18th amendment scenario, a top-down approach in the formulation of development policies may not be very fruitful.

This was expressed by Hafiz Pasha, Former Minister for Finance and Economic Affairs, at a special meeting of experts on the “Economy of Tomorrow (EoT)” here Tuesday, jointly organized by the Sustainable Development Policy Institute (SDPI) and Friedrich-Ebert-Stiftung, Pakistan.

The former Minister also observed that tax reforms have become extremely crucial for Pakistan and that there is a need for a more redistributive fiscal policy. The government should also be focusing more on short and medium term policies aside from the Vision 2025. He added that there is a need for further strengthening the network of institutions within the South Asian region. The media should be engaged more proactively to promote the discourse of inclusive growth. The privatization decision of the Government of Pakistan should take into account labour interests and the impact on consumer welfare. Track 2 initiatives should work towards strengthening economic policies in a more inclusive manner. He stressed that the reform process should be an indigenous effort.

Speaking at the occasion, Abid Suleri, Executive Director SDPI said that there has been increased willingness of the political parties in Pakistan to listen to and deliberate over issues of development. Vaqar Ahmed, Deputy Executive Director SDPI, while summarizing the proceedings of the three-day meeting, said that domestic resource mobilization in Pakistan would remain a challenge, particularly in the context of social safety nets. It is also important to ensure lower carbon emission with economic growth in the country. He stressed that the reform process should be undertaken through the government platform. There is a need for greater dialogue at the sub-national levels for setting an economic growth and development agenda, he observed.

Nadeem Javaid, Advisor to the Minister for Planning, Development and Reforms said that while energy and water security are top priorities of the government, human capital formation is also an urgent need particularly given the country’s demographic structure with over 30% of the population under the age of 30.

Marc Sexer Resident Representative, FES Thailand said that economic reform and development requires political will. This can happen with collaboration between institutions and by establishing a platform which facilitates transition towards more inclusive economic regimes. There is also a need to reconsider conventional economic thought and move towards new ways of thinking which can lead to ‘socially just, resilient and green dynamic growth’. In this context, the role of policy makers is prime importance.

Philipp Kauppert, Resident Representative, FES Pakistan remarked that the political economic context should be closely considered in the debate for economic growth and reform. He further observed that it is encouraging to note that there is a momentum to build an integrated regional model amongst South Asian countries. Muhammad Ziauddin, eminent journalist reiterated that the media can also play an important role in creating awareness for development reforms.

Ramgopal Agarwala, economist from India highlighted that change process in favour of development has to be led from within the country. However, successful models from the developed countries can be considered as guiding case studies instead of developing new frameworks altogether.

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