People, partnerships, private sector key to development, prosperity, says Dr Hafeez Shaikh
Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has described development of human skills, working in partnerships and allowing the private sector to work at its full potential as the three key drivers of development and prosperity for any country or nation.
“The big lesson of development history is the model presented by countries like Japan, Singapore and Scandinavia which focused on skill enhancement, technical capability and work ethics of their people,” he said while delivering a keynote address to a well-attended session on ‘Prospects of Economic Integration in SAMECA: Exploring New Vistas of Cooperation’, arranged by the Islamabad Policy Research Institute (IPRI). The seminar was part of two-day ‘Margalla Dialogue: Peace and Development in South Asia, Middle East, Central Asia (SAMECA) held at a local hotel.
Dr Abdul Hafeez Shaikh said that it was essential for countries and the governments to keep their people and the development of their skill-sets and capability as the focus of their efforts. He also pointed out that no country achieved development and prosperity alone and the only way to bring prosperity to our people was to find a way to sell our products to others and to ensure that others partnered with us. “This is the focal lesson of development as no country in the history has brought prosperity to its people alone, especially without its neighbours,” he said, citing the example of Chinese leadership which understood this lesson and brought 700 million of its people out of poverty.
The Adviser underlined the role of private sector as being the key driver in prosperity by saying that the only way to bring prosperity was to allow the private sector to perform unregulated as job of bureaucrats and government ministers was to formulate policies and act like facilitators while real action was performed by private sector people who could drive and accelerate the pace of development and progress.
He said that the region was marred by many problems including poor connectivity, low trade, no rail links, difficult border crossings, excessive visa restrictions, poor infrastructure links, un-harmonised customs, poor access to insurance and finance, archaic foreign exchange rules and restrictive visa regimes. The solution, he said, lay in finding a way out through greater access and more interaction between peoples to establish real human contacts.
Dr Abdul Hafeez Shaikh also spoke on the role of money in bringing prosperity and development by saying that there was so much money chasing so few projects. He said the Asian Infrastructure and Investment Bank alone had USD 100 billion while the World Bank, Asian Development Bank and Islamic Development Bank share capital was also impressive but they were insignificant when compared to hundreds of billions of dollars possessed by the private sector. “All this money is waiting for good purchase but countries make bad policies which don’t attract those hundreds of billions of dollars, and create lots of obstacles in the way of that money to come to our countries,” he said, adding that misleading the private sector was impossible and the private sector would only bring its money to a country where everyone else also brought his or her money.
He said that it was necessary to bring in a policy regime that was not obstructive and restrictive in nature and the best thing the governments could do was to get out of the way of businesses and value the people who were legitimately making money. “Until and unless we value people who are legitimately making money, we will not be able to have a situation in which people can flourish and generate jobs. You cannot hire millions and millions of people in government departments as the business of government is not to create jobs in the government departments but it is to create jobs in the rest of the economy and that can happen only if you provide the right sets of incentives.”
Talking about Pakistan, Dr Abdul Hafeez Shaikh said the country was trying to make the neighbourhood not as difficult as it was. “We live in a tough neighbourhood, but we want to get it better. We want the Afghanistan situation to get normalised so that the region as a whole can thrive. We do not want problems between Iran and Saudia. There is no point getting tricked into a conflict as the stake are high, innocent people die and region suffers and ultimately not much is gained,” he said, adding that “we have to try and remain focused on peace-building and cooperation”.
About the situation on the economic front, the Adviser on Finance and Revenue said the government had inherited a difficult economic situation but it was taking tough decisions which had helped bring down current account deficit by over 40 per cent, have a positive primary balance for the first time and also having a fiscal deficit which is significantly reduced in the first four months of this year compared to last year.
He said the World Bank had also acknowledged Pakistan as one of the top ten reformers in the ease of doing business. “This year our portfolio investment from the rest of the world is rising … We have achieved energy self-sufficiency. We are having a very open visa policy and anyone from the countries being represented here would get visa on arrival. We have the Torkham border working 24/4 hours. We have a currency swap with countries like China. We are trying to have the CASA-1000 with Tajikistan and Kyrgyzstan. We are having the US$7.5 billion TAPI Pipeline Project. We have a very liberal foreign investment regime without restrictions. You can participate with as much equity as you want, you can have as much shares as you want in any industry you want and you do not have the requirement of having a local partner. We are also giving many incentives to our exporters. We are subsidizing their gas, their electricity, their loans and we have no taxes on exports. If you want to come here and generate exports for other countries, you are most welcome.”
Addressing the participants of the forum, he said that balance, wisdom and the desire to see the world as a whole as a place of shared humanity were critical and as for as Pakistan was concerned, CPEC was an opportunity that Pakistan must not miss. However, he said the promise of CPEC could only be fulfilled if it was not confined to China and Pakistan. “The CPEC can either be transaction or it can be a transformation. For it to be a transformation it must be China Plus and the other countries have to be welcomed and participate in this great transition. If we stay wise and recognise the strength of our relationship with China but also allow other countries to participate in CPEC, its promise would be fulfilled.”
Towards the end, he suggested that fora like the Margalla Dialogue must set timelines and objective targets on the lines he had highlighted, to ensure continuity and positive results for future.
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