Pakistan Pres Feb07

8/9/2019 Pakistan Pres Feb07

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Global

EconomicPolicyInstitute

Pakistan; Challenges inPolitical-Economic

DevelopmentICEA Feb 13 th !!"P#o$esso# Paul E % &eynol's

()*D)*

+el , ! ." ./"..

%ob 0 % , "2" 1..!."E mails

paul#eynol's email4com

paulem#eynol's gmail4com


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Global


Pakistan5showing NWFP,FATA &

Northern Areas


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Global


6hy is Pakistan impo#tant

7• t#ategic geo-political 0 t#anspo#t b#i'ge %i'-East an' In'ia 0 China• 1/8-1"!m pop 9 More people in Pakistan than in Russia• Potential $o# :ashmi# a#e-up 9 #isk o$ big impact on


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Global


Pakistan; Challenges in Political-EconomicDevelopment

%ac#o5 mic#o 0 political

conclusions4 Needing to !reak out of gridlock", govern#ent is in adi$icult position

14 %ac#oeconomic imp#ovements goo' - but slo< #e$o#ms ingove#nment 5 in #egulation an' uencesBM4&' ()* M4political #e$o#m g#i'locke' by constitutional-political st#uctu#es an' the P#esi'entBs nee' to please too#an+ #asters

' Role of *ri!al !order -Afghan. areas and relationship with*he /est" is critical for political and economic refor#


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Economic pe#$o#manceEconomy stabilise' 0 g#o


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F#agility o$ economicp#og#ess

• Public 'ebt 'ecline' $#om 2"N o$ GDP annual ave#age 122!s - to"843N by !! -3 0 8/N !!8-/

• Annual Jscal 'eJcits $ell $#om an ave#age e cl g#ants o$ /4 N o$GDP5 last 8 yea#s o$ last 'eca'e5 to 4 N J#st 8 yea#s o$ this 'eca'e

34"N !!/-" est4• Ave#age t#a'e policy ta#iKs at no#mal (DCB levels a$te# 6+) memb4

in !!1• =@+MMMMMM=@+MMMM44• In'ust#y still less than !N o$ GDP• !!8?!/ investment at 1/48N o$ GDP - too lo< $o# sustainable g#o


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Global


Economic g#ouality-o$-investment

p#oblems• (o< national savingBs #ate5 1" pe#cent o$ GDP5 'ue to Jscal 'eJcits an'

negative inte#est #ates• N o$ GDP spent on the milita#y 5 possibly much highe#5 p#essu#e on 'eJcit• )nly .N o$ population is in the


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Institutions #esponsible have ove#laps 0gaps in #e$o#m

5iagnosticitis, polic+ silos 2 anal+sis4paral+sis 6" New institutions to solve this

pro!le# 6 • Cabinet Division 3 Depts• Economic Council• )Kice o$ the Economic A'vise# • %inist#y o$ (a< 0 Sustice• *ational Comm4 $o# Govt4

&e$o#ms

• Civil e#vice &e$o#m @nit• (a< 0 Sustice Commission• P%Bs ec#eta#iat• %inist#y o$ I+• %inist#y o$ Pa#liamenta#y AKai#s• Competitiveness uppo#t Fun'

• P#ovinces5 FA+A5 PA+A • +#a'e Co##i'o# Committee• )Kice o$ P#ivate Public

Pa#tne#ships• Fe'e#al %inist#y o$ +#ibal A#eas• %inist#y o$ Inte#-P#ovincial Coop4

• %inist#y o$ Finance 0 Planning• %inist#y o$ In'ust#y5 P#o'Bn 0

I• =oa#' o$ Investment• %inist#y o$ Comme#ce

• %inist#y o$ Econ4 AKai#s EAD• %onopoly Cont#ol Autho#ity • ousing 0 6o#ks Div4• ecu#ities 0 E change

Commission• Planning Commission5

membe#s• *ational &econst#uction

=u#eau• Economic Coo#'ination

Committee• Public ecto# &e$o#m

Committee


10/28

Global


6#ong mic#o-economic#e$o#m tools 7

Govern#ent spending versus govern#ente$orts"

uge political ui#e' to ove#come 'eep-#oote'systemic p#oblems 0 inte#ests 9 'oes political

unce#tainty p#event this 7

• Financial 'eepening #e$o#ms * 5 Pakistani Investment =on'san' #e$o#ms o$ inte#me'iation system =a'la un'e#


11/28

Global


Pakistan e ample Hteps?time an' cost o$

cont#act en$o#cement ou#ce 6o#l'=ank !!/

Figure 3.4a Steps and Time to Enforce a Contract

0

10

20

30

40

50

S r i L a n k a

T u r k e y

C h i n a

P h i l i p p i n e s

T h a i l a n d

N e p a l

a n g l a d e s h

S o u t h ! s i a

" a l a y s i a

# i e t n a m

$ n d i a

P a k i s t a n 0

100

200

300

400

500

No Steps Time

Figure 3.4%Cost to Enforce a Contract

(%of contract value)

0

10

20

30

40

50

60

T u r k e y

T h a i l a n d

" a l a y s i a

a n g l a d e s h

S r i L a n k a

C h i n a

N e p a l

# i e t n a m

P a k i s t a n

S o u t h ! s i a

$ n d i a

P h i l i p p i n e s

• Case backlog - half are commercial - in the High Courts of in!h an! the Pun"abnumber o#er a hun!re! thousan!, an! for the lower courts, in the millions - $% lan!,'% challenges to regulations, rest banking(em)lo*ment

• When cases !o go forwar!, it takes, on a#erage, more than $+ ste)s, more than a *ear an! almost a thir! of the contract #alue to enforce a contract

• *stem is ill-)re)are! for mo!ernisation - new legal frameworks in com)le areassuch as foreign in#estment, insol#enc*, mono)ol* regulation, anti-mone* laun!ering,


12/28

Global


&eal-ua#te# o$e po#t costs an' come $#om th#ee sou#cesH the pet#ol ta 1

pe#cent o$ e po#t invoice 5 E po#t Development Fun' !4 8pe#cent o$ e po#t invoice 5 an' unoKicial5 spee' money paymentsapp#o imately &s 15 8! pe# consignment 4 TPoo# po#t

gove#nance cont#ibutesU4• (aye#s o$ ta es 0 levies to agents5 the PAs5 an' secu#ity

paymentsB a'' to costs4 igh ta##i$s in many secto#s4

• PakistanBs agg#egate 'i#ect labo# cost R!4"8 ?hou# - highe# thanChinaBs R!4// an' In'iaBs R!4 ! 9 but p#o'uctivity lo


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Global


&esistance to p#o-g#o


14/28

Global


Futu#e economic#e$o#m challenges

• &egulato#y >uality an' the link to #ent-seeking• Poo# 'omestic e po#t pe#$o#mance #elative to e pectations5 an' the lack o$

investment to ove#come high costs• Capital in$#ast#uctu#e p#oblems 9 access to 'ebt 0 e>uity Jnance $o# e po#t

'evelopment5 an' absence o$ ventu#e capital 0 #eal secto#B investment $un's

• (o< g#o


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Fiscal 'ecent#alisationissues

Pakistan is highly cent#alise'Jscally Growth 2 political refor# re7uires

change&e$o#ms sta#te' in !!1 but


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Global


Fiscal Decent#aliQation in %aLo#Developing Count#y Fe'e#ations

•Federation, Developing Country •Sub-National Expenditures(% Total)

•Sub-NationalExpenditures (%

D!)

•Sub-National "#n$evenues (% Total

National $evenues)

•Sub-National"#n $evenues(% D!)

•( ) •( ) •( ) •( &)

• Pakistan * •' * •+ ' • • .

• ndia • . * •/ 0 •'' 0 •+ /

• Ethiopia •'1 . •. 1 •/0 •'

• Nigeria •'0 •/' + •/ •' /0

•Sout2 34ri5a •1+ 1 •/0 . •/0 . •+ /

•3rgentina • •/* • * •0

•6ra7il • / •/1 ' •'. •/ 1•8exi5o 9 •41 •7.4 •*1 1 • 1

•Venezuela •19.6 •: •:/1 •:

•$ussia •'0 1 •/* •'* •/'

•8alaysia •// •* •. / •*

•Sour5e; Figures 4or !a+ budget 8F FS (/ >* 1), ?ost re5ent year available, @6 $eports 4or unavailable 5ountries ( italics) 3ss2are o4 5entral, state, and lo5al govern?ent, net o4 on#ard trans4ers by 5entral and stage govern?ents Sub-National $evenues do not in5lude4inan5ing 93lternative to FS expenditure 4igures 4or 8exi5o using @orld 6an< (@orld 6an< * A * )


17/28

GlobalEconomic

PolicyInstitute

@ne>ual #egionalincomes

Ta%le &' (ey $ndicators for Pakistan)s *isparate Federation

Population Share GDP Per Capita(2004/5)

AreaHuman

Development Indexum!er o" #o$alGovernment%

%>?illion $s

%>


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GlobalEconomic

PolicyInstitute

Comple system o$ P#ovincialJnancing


19/28

GlobalEconomic

PolicyInstitute

+he status o$ the+#ibal A#eas ac#oss

the Du#an' (ineB• isto#ical A$ghan te##ito#ial claims ove# Pashtun *6FP5 PA+A5 FA+A5 0Pashtun a#eas in =aluchistan• A'ministe#e' by PunLab =#itish Commissione#5 then 12!1 'i#ect Delhi #ule

o$ *6FP P#ovince - settle' 0 8A*A tri!al areas sepa#ate5 both as *6FP A$ghan buKe# Qone

• epa#ate status5 continue' post-in'epen'ence 9 constitutional FA+A buKe#

Qone an' tool against Pashtun nationalism on !oth sides of the !order9 notelecte' A " 4 N/8P Governor for#all+ represents President• P#e- 0 post- colonial #egimes 9 no t#oops 'ealB


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GlobalEconomic

PolicyInstitute

Comple gove#nanceH asimpliJcation

5i$icult to refor#

FA+As.ostl* Pashtun/0

'm )o)0 on Pakistansi!e0

1 2Agencies30

PATAs

*o#th 6est F#ontie#P#ovince

ettle! areas 24istricts3

Presi!enc*Gove#nmen

t

Prime.inister0Cabinet0 Donors.

FATA4e#elo)ment

Authorit*

1 Political Agents

Naib-tehsildar

5 ec,

"u!iciar*,legislature/

AF67N

Fun!ing04onor

)ro"ects 0

=alochistan

.aliks

8ungis

Pro#3lFATA

ecretariat

Agenc*Counci

ls

9nter-Tribal :irga

P5AC5

A;655.5NT


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GlobalEconomic

PolicyInstitute

&e$o#m an'?o#&esolution

%ilita#y inte#ventions 9 pa#t o$the solution o# pa#t o$ thep#oblem 7

• Pa#liament can no#malise #ights an' cou#t systemFC&


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GlobalEconomic

PolicyInstitute

Can economic g#o


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GlobalEconomic

PolicyInstitute

ho< me somethingB&e$o#m ve#sus uncove#ingB

$o#eign Jghte#s

Foreignuencers, & 2cron*

ca)italism3

4eobanis & PashtunNationalists

? A 2War on Terror3

issues

Tribal 5l!ers

8ocal N;7s,)ro-

!emocrac*grou)s .ilitar*,

;o#ernors,& PAs

9nfo>ow

Infobarrier


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GlobalEconomic

PolicyInstitute

+he Inte#-Si#ga Peace Ag#eement/h+ did the+ %ght, wh+ did the+

agree 6

A counterproductive !rutal search for foreign #ilitants 6 ()6-(EVE( 6A& • Sune !! - @ p#essu#e 9 t#oops to captu#e %)5 )=( etc• %a#ch !! 9 sea#ch $o# $o#eign militants +#ibes #e$use'B

$aile'B 9 Fo#me# I I Gene#al ICG !!/• Govt4 sue' $o# peaceB Sune !!

• *ov ! ag#eement 9 amnesty5 cash5 =@+ han' ove# $o#eignmilitants5 0 stop c#oss-bo#'e# attacks• Feb?%a#ch !!85 /-point peace plan


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GlobalEconomic

PolicyInstitute

Conclusions

• Goo' >uality mac#oeconomic management in Pakistan un'e#'iKicult con'itions 9 but #isks $#om mic#oeconomic #ealities

• Deep-#oote' p#oblems in #eal economyB #e$o#ms an' #e$o#m

Pakistan Pres Feb07

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Transcript of Pakistan Pres Feb07