SUSTAINABILITY AND TRANSPARENCY IN FEDERAL DEBT
Policy Research Institute of Market Economy organised the 3rd National Debt Conference in Islamabad (Crystal Ballroom, Marriott Hotel) on Saturday, the 12th of November, 2016.
The marathon conference was brought together through the help of the Friedrich Naumann Foundation for Freedom to raise awareness and debate revolving around the national public debt of the Federal Government.
Policy makers, regulators, parliamentarians, and experts were in attendance through the day-long proceedings of the conference.
Ms Aisha Malik of the Friedrich Naumann Foundation for Freedom welcomed the participants to the conference and called for a focused and productive discussion on what is perceived by many as a critical economic issue.
The Friedrich Naumann Foundation for Freedom has been supporting the National Debt Conference for three years now, and this year supported the Pakistan Debt Clock this year to raise awareness on public debt sustainability, and management.
Executive Director PRIME Institute Ali Salman emphasised on the need for debate on the issue of debt because opinions on the issue diverged so significantly.
Dr Ashfaque Hassan Dean of NUST School of Social Sciences and humanities, raised concern about the future sustainability of the public debt, citing predictions which estimate that Pakistan’s external debt may reach $110 Billion by 2020, debt servicing will cost us $10 Billion.
Dr Ashfaque said that we build forex reserves through regressive borrowing, and the government of Pakistan required a debt strategy instead of following donor-driven agendas. (Dr Ashfaque's original presentation)
Session on Debt Sustainability
Former Governor State Bank Shahid Kardar chaired the first panel of experts on the sustainability of the public debt.
Member of National Assembly Asad Umer stated that tax amnesty schemes are a total failure because they reward tax evasion, while those who pay taxes end up suffering the most.
He blamed the government for not focusing on economic fundamentals, and also blamed parliament for not playing its constitutional role.
Sakib Sherani CEO Macroeconomic Insights said that Pakistans export performance is deteriorating, and referred to the Ministry of Finance as an Ostrich, with its head under the ground. (Get Sakib Sherani's original presentation)
Zafar Masud the Director General at the Central Directorate of National Savings stated that Pakistan’s debt problem was not as alarming as was being portrayed, and claimed that the national debt was well under control for at least the next 4 to 5 years. (Get Zafar Masud's original presentation)
M Ali Kemal, a distinguished Research Economist from the Pakistan Institute of Development Economics claimed that Pakistan needs 5 to 6 percent real GDP growth to ensure the sustainability of our debt. He predicted that the debt would increase by 4.26 times by 2025. (Get Ali Kemal's full presentation)
Session on Transparency of Federal Debt
The second session on the transparency around the public debt was chaired by the former ambassador of Pakistan to the WTO, and now President (honorary) of the PRIME Institute Dr Manzoor Ahmad.
Nasim Beg Chief Executive, Arif Habib Consultancy, while sharing his thoughts, stated that if Pakistan eliminates borrowing by the government, the national economy would remove a significant element of government spending that enriches a few (and their heirs) at the cost of the future taxpayer. (Nasim Beg's original presentation)
Syed Abdul Khaliq, Executive Director Institute for Social and Economic Justice pointed out that the issue of debt was not just a political issue, but was also a critical social issue affecting the fundamental rights of citizens. (Syed Abdul Khalique's original presentation)
Raja Amer Iqbal, President of the Rawalpindi Chambers of Commerce in his addressed stated that government borrowings are used to finance the operational expenses of the Federal government, but argued that the debt should instead be used to create economic space for private businesses to engage.
Ali Salman stated that Pakistan's economic growth performance does not justify the sorts of loans which our federal government has acquired. He said that Pakistani governments of the past has borrowed very irresponsibly. He said that debt debate was about two core issues, public finance, and private enterprise.
In her closing speech, Mrs Ayesha Bilal, the newly appointed Chief Operating Officer of PRIME Institute called for a return to the ideals of Quaid e Azam Muhammad Ali Jinnah. She thanked people for supporting PRIME Institute's work, and promised to keep pushing for a more Open, Free, and Prosperous Pakistan.