The think tank, which was recently established under the Prime Minister’s guidance to consult on the coronavirus related economic downturn and mitigation of the subsequent risks, identified key areas during the Coronavirus crisis on Saturday to boost the economy.
According to the press statement issued by the Finance Ministry, Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank.
The forum was appointed to provide a venue for collective thought on the developing situation arising from the medical crisis relating to Covid-19 and its economic spillover. Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Dr. Waqar Masood, and Arif Habib.
Following comprehensive discussions on emerging issues, the forum identified key areas for policy initiatives, including monetary and banking, fiscal and public finances, social security networks, small and medium-sized enterprises, commodity prices, public health challenges, and private sector and NGOs’ position.
Advisor to PM on Finance said, “There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.”
Participants identified the need for more downward policy rate modification coupled with the public passing on of the benefits of reduced oil prices on the global market. The focus of the deliberations remained on improving aggregate economic demand and supply, with emphasis on lower-income groups and small firms.
As a strong and vibrant banking sector is necessary to boost the economy under such strong recessionary headwinds, the need for more liquidity for banks has been debated. Ways of further promoting remittances, the financing of agriculture, and the timely lifting of crops and vegetables from small farmers have been investigated.
Apart from evaluating the feasibility of the GST on consumer products from 17pc to 5pc, the forum addressed the need and scope for a bailout package for large businesses and exporters to kick-start consumer spending for the next 2 years. The limitations of FBR amid high revenue targets in a collapsing economy were highlighted by Finance Secretary.
Thinktank economists stressed the need to develop PSDP to promote labor-intensive projects apart from developing robust financing plans for agriculture.
Through these off-balance sheet financing arrangements, which promote private sector investment in public sector projects, the need for public-private partnerships has been elaborated to build fiscal space within the public sector.
Finance and Revenue advisor to PM took the lead in choosing the most important topics for proper policy discussions and decisions.
“Prime Minister of Pakistan may participate in the next session to give a boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for the economy in a pragmatic fashion,” he said.
Advisor agreed that programs with the highest, medium, and lowest impacts should be sorted out and grouped based on short, medium, and long-term horizons in order to prioritize the most important activities, with appropriate funding and implementation arrangements.