03/03/2023by PRIME Institute

PRIME'S Charter of economy: a blueprint for Prosperous economic future of pakistan

Introduction

In the past, prime ministers and Federal cabinet members under threat of losing popularity mobilize public resources and manipulate economic resources using policy tools. Pre election populist spending stimulates consumer demand, and disproportionately increases import spending, throwing the current account balance into unsustainable deficit levels.
Because the highest import spending of the country is made on petroleum imports, and the government has a near monopoly on these imports, the government runs out of dollars to continue import purchases.
Broad scale controls are activated in favor of slowing down international trade. When imports are choked out, it stresses that portion of the export sector which is in the business of processing imported goods or finishing imported raw materials.
All this occurs in the hope that multilateral financing institutions come to the rescue. Inevitably, the result is expensive petroleum, higher taxes, higher inflation, and shortages of essentials. This throws off existing economic relationships between private players influencing the viability of exchanges in unpredictable ways.
Additionally, political parties have been involved in blocking off civic infrastructure, and greatly affecting the lives and businesses of private citizens. Economic players cannot function optimally when access to economic capital frequently become unavailable.

Follow the link to access Pakistan's Charter of Economy.

Charter of Economy

In 2006, Mohtarma Benazir Bhutto and Mian Muhammad Nawaz Sharif signed the charter of democracy. This landmark pre-constitutional agreement between the two largest political parties of Pakistan serves as the foundation upon which parliamentary continuity in Pakistan has been sustained since 2008. With the goal of blocking undemocratic power upheavals in the political establishment, the arrangement became the basis of several constitutional amendments.
We have heard from players of almost all the political parties calling for a similar Charter of Economy. The stated goal of such a charter may be surmised as the elimination of political interests in the deployment of economic controls, and in the distribution of public finances.
Such a charter would have the effect of delinking public finances from the state economy in a meaningful way. It would be able to cultivate budgetary discipline, conservative fiscal policy, stable monetary policy and improve cross border trade prospects.
In pursuit of a stable economic future for Pakistan, the policy research institute of market economy is currently engaging with top legal and public finance expert Dr Ikramul Haq to draft a technical agreement known as the Charter of Economy.
Alongside this effort, PRIME is actively supplementing the charter with a consensus-building exercise between political stakeholders, directly reaching out to the Central Executive Committees of the top three political parties represented in Parliament: PTI, PPP, and PMLN. Through various outreach activities, such as meetings with politicians, newspaper articles, and social media messaging, PRIME is building political capital around the issue, positioning the Charter of Economy as a critical public interest matter for the welfare of all Pakistanis.