World Bank criticizes Pakistan's flawed economic model
The World Bank Country Director, Najy Benhassine, has
expressed concern over the inadequacy of Pakistan's current economic model,
noting its lag behind comparable nations.
In a recent Policy Vision article published by the UNDP,
Benhassine highlights the urgent need for policy changes to overcome
developmental challenges and move away from inequitable practices. The
concentration of growth benefits among a select elite, coupled with a reversal
in poverty reduction progress, underscores the need for immediate attention.
World
Bank concerned over obstacles in privatization of Pakistan’s State Owned
Entities (SOEs)
Mr. Benhassine emphasizes Pakistan's vulnerability to
climate change and advocates for addressing policy failures and distortions in
crucial sectors like agriculture and energy. In the agricultural sector, he
recommends dismantling subsidies and price restrictions that hinder smallholder
farmers in a low-value system, promoting resource-intensive and environmentally
harmful practices.
Proposed reforms in the energy sector aim to enhance
financial sustainability, increase efficiency in distribution companies through
greater private participation, and reduce high electricity generation costs by
promoting renewable energy.
Despite the recognized need for policy shifts, Mr.
Benhassine acknowledges that reform efforts may face resistance, urging those
with influence to seize the current crisis as an opportunity for necessary
changes. He stresses the imperative improvement of fiscal management, citing
unsustainable debt servicing costs and insufficient resources for human
development and infrastructure.
World
Bank urges Pakistan to implement real estate sector taxation
The call for reforms extends to quality enhancement in
government spending, reduction of regressive subsidies, and minimizing losses
from inefficient state-owned enterprises. Mr. Benhassine suggests generating
more revenue from the affluent through progressive taxation and reducing tax
exemptions.
A stronger, more dynamic, and open economy is deemed
essential for improved living standards, requiring a reduction in protectionist
measures and tax distortions favoring non-tradable goods to encourage exports.
The overall business environment, especially for smaller firms, needs
improvement, emphasizing the importance of streamlining government processes
and reducing discretion-related costs. Addressing structural macroeconomic
imbalances, particularly on the fiscal side, is crucial for economic stability
and attracting investors.
World
Bank expresses disappointment over Pakistan’s tax collection efforts
The Asian Development Bank’s Country Director in Pakistan,
Yong Ye, echoes the sentiment, emphasizing the importance of consistent
policies and an ongoing reform momentum for creating an environment conducive
to addressing complex economic challenges. The ADB commits to supporting
Pakistan’s development, aiming for prosperity, inclusiveness, resilience, and
sustainability under the ADB Strategy 2030.
Source: Minute Mirror