Economic challenges in a changing national and global environment

F.P. Report

LAHORE: The second day of the Conference opened with a session on Trade, Industry and Competition. The session chair was Dr. Theresa Chaudhry (Professor of Economics, Fellow of the Centre for Research in Economics and Business (CREB), Lahore School of Economics).

Dr. Naved Hamid (Director, Centre for Research in Economics and Business (CREB) and Professor at the Lahore School of Economics) initiated the session with a comparative study on Pakistan and India.

The aim of the paper (coauthored with Fatima Arshad and Fatima Tanveer, Lahore School of Economics) was to decompose Pakistan’s growth since 1960s into growth due to (i) change in competitiveness and (ii) structural change, compare the country’s growth experience with India and finally, to identify some of the factors that can explain the difference in the economic performance of the two counties over time. The study provided important insights about potential interventions that could get Pakistan back on a high growth path.

The second paper of the session by Dr. Azam Chaudhry (Professor of Economics and the Dean of the Faculty of Economics at the Lahore School) and Gul Andaman (University Putra Malaysia) provided a roadmap to diversifying Pakistan’s exports by operationalizing the concept of product space and identifying new products for the country, which not only reflect Pakistan’s prevailing production capabilities but also represent higher levels of sophistication.

The third paper in the session by Dr. Rajah Rasiah (Professor of Economics at the Asia Europe Institute, University of Malaya) and Dr. Muhammad Shujaat Mubarik (Muhammad Ali Jinnah University) examined trends in overall consumption of energy per capita as well as by renewable and non-renewable energy sources for Pakistan, and a sample of comparator East Asian economies like China, Japan, Korea, Malaysia and Thailand. The analysis was useful in unraveling a policy relevant energy self-sufficiency policy direction for Pakistan, which could support future economic growth for the country.

The session was followed by a insightful discussion in which Syed Babar Ali (philanthropist and former caretaker Finance Minister of Pakistan) emphasized on the importance of reducing population growth, promoting quality of education and improving the Pakistan’s agriculture competitiveness to harness the country’s future growth potential.

Papers presented in the second session continued to discuss issues and challenges constraining Pakistan’s industrial competitiveness. The session was chaired by Dr. Naved Hamid (Director, Centre for Research in Economics and Business (CREB) and Professor at the Lahore School of Economics).

The first paper in the session by Dr. Muslehuddin and Dr. Nasir Iqbal (Associate Professor, Pakistan Institute of Development Economics) explored underlying factors responsible for sluggish industrial development with a focus on industrial competitiveness. Furthermore, the paper aimed to identify key drivers of industrial competitiveness focusing in particular on the textiles and clothing industry, which is considered the mainstay of Pakistan’s economy.

The second paper in the session by Dr. Daud Ahmad (Burki Institute of Public Policy and Former World Bank Advisor) focused on national policies, institutional reforms and changes in the governance structure of Pakistan’s energy sector since independence. He ended his talk with multifaceted recommendations including lessons for governance, financial and the technical side.

The third session of the day focused on agriculture. The session was chaired by Dr. Ahmad Masood Khalid (Dean of School of Business and Economics, Universiti Brunei Darussalam). The first paper in the session by Dr. Mahmood Ahmad (Visiting Researcher at Water, Informatics and Technology Center, Lahore University of Management Sciences) and Mahira Khan (Lahore University of Management Sciences) explored water management issues facing Pakistan by examining the institutional mechanisms, technical challenges, and practices with regards to Pakistan’s National Water Policy.

The paper concluded with a need to focus on cost efficient demand-management policies to solve the country’s water issues and some feasible suggestions varying from participatory groundwater management to transforming electricity pricing policies to control groundwater overdraft. The second paper by Dr. Ghulam Saghir (Assistant Professor, University of Central Punjab), Maha Ahmad (Assistant Professor at the National University of Sciences and Technology) and Dr. Eatzaz Ahmad (Professor of Economics, Quaid-i-Azam University) provided an overview of agricultural pricing policies in Pakistan. This included a cost-benefit analysis of major agricultural products by providing their employed effective protective rates as well as profitability rates.

The final paper in the session by Dr. Abdul Salam (Professor of Economics, University of the Punjab) explored the consequences of varying exchange rates on costs of important farm inputs used in the production of wheat and rice – two which are important contributors towards the agricultural sector in Punjab.

The last session of day 2 focused on China-Pakistan Economic Corridor (CPEC) and Pakistan’s relationship with China with a special emphasis on trade including Free Trade Agreements (FTAs) and Special Economic Zones (SEZs). The chairperson for the session was Dr. Azam Chaudhry (Professor of Economics and the Dean of the Faculty of Economics at the Lahore School).

The first paper in this session by Dr. Matthew McCartney (Associate Professor, University of Oxford) analysed the prospects of the CPEC initiative for the Pakistani economy with a particular focus on the study of western China.

The second paper in this session by Dr. Yasmin Abdul Wahab (Trade Adviser, Ministry of Commerce) and Ghulam Qadir (Advisor, Ministry of Commerce) reviewed the first phase of the China-Pakistan Free Trade Agreement (CPFTA) with the objective of predicting the impact of the second phase of the CPFTA, that is currently under negotiation, and to design policies to correct huge trade imbalance and facilitate economic development through free trade agreement.

The last paper in this session by Dr. Jamshed Y. Uppal (Associate Professor of Finance, Catholic University of America) and Rabab Mudakkar discussed the implications of the emergence of the Chinese yuan as an international currency, playing a major role in global finance. In particular, the paper explored how the Yuan-Rupee exchange rates have evolved over time vis-à-vis other hard currencies, and how it has been affected by CPEC projects and provided policy implications for managing the country’s foreign exchange.

In the end, a brief summary of key messages that emerged during the conference was provided. This marked the end of the 15thInternational conference on management of the Pakistan economy, organized and hosted by the Lahore School of Economics.