Pakistan seeks UK advice for economic plan

International - بین الاقوامی , / Tuesday, May 28th, 2024

ISLAMABAD:
As the United Kingdom government starts advising Pakistan to develop a “home-grown” economic plan, confusion persists in official circles about the prime minister’s move to outsource the planning when the script of a new International Monetary Fund (IMF) programme has already been finalised. Stefan Dercon, the policy advisor of the Foreign Commonwealth and Development Office (FCDO), along with members of the PM’s committee on homegrown economic development plan, held discussions with Pakistani authorities on Monday. They convened separate meetings with Finance Minister Muhammad Aurangzeb and PM Shehbaz Sharif. The Prime Minister’s Office this month broadened the committee’s membership for the homegrown economic development plan, welcoming Professor Stefan Dercon, policy advisor to FCDO, and Dr Adnan Qadir Khan, FCDO’s chief economist, into the forum. Stefan Dercon has previously highlighted the issue of elite capture of resources in Pakistan, which has hampered the country’s progress. Professor Adnan reiterated earlier this month that a country operating normally would not require an IMF program. At a juncture when the government has nearly finalized the future economic policy trajectory under the IMF’s guidance, engaging with FCDO officials suggests limited manoeuvrability outside the IMF’s framework for implementation. The planning ministry has also unveiled its long-term 5Es framework, encompassing exports, e-Pakistan, environment and climate change, energy, and equity and empowerment—key focal points for Pakistan’s forthcoming development. Sources informed The Express Tribune that ambiguity prevailed during these discussions regarding the rationale behind involving the United Kingdom government while Pakistan was negotiating a deal with the IMF. The IMF has gone back to Washington without reaching a staff-level agreement and is waiting for the approval of its dictated budget by the National Assembly before striking a deal. Under the rules of the business of 1973, economic planning is the job of the planning ministry but it has been overshadowed by an enlarged role of the finance ministry. The IMF also now hardly consults with the planning ministry about the medium-term economic projections. As a result, the economic policies are being framed with the ultimate objective of fiscal consolidation which in turn suffocates economic growth.The members of the home-grown committee were also not clear whether their advice had been sought for the budget or for the IMF programme and to what extent their advice could be incorporated under the IMF programme, according to a member of the committee who spoke on condition of anonymity. There were more questions than answers during these meetings, according to another participant in these meetings.