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Pakistan’s Economic Growth Hindered by Bureaucracy and Outdated Policies

Pakistan’s economic growth has been hindered by bureaucracy and outdated policies that do not promote liberalization, intervention, subsidies, or effective regulation. This has prevented the country from becoming a global leader in exports, unlike other countries that embraced these principles after the 1980s.

For the past 34 years, the country’s bureaucracy has maintained a fixed mindset and resisted change. This resistance to learning and embracing market-based approaches has contributed to the country’s economic decline. To address this, the government must implement reshuffling and include private sector professionals to build capacity and foster a more dynamic and productive bureaucracy.

Outdated Policies Holding Back Agriculture and Industries

One of the major issues facing Pakistan is the orthodoxy of interventionist policies dating back to the 1950s. These policies have hindered the growth of the agriculture and industry sectors for the past 76 years. While the country has been focused on growing four major crops – wheat, cotton, rice, and sugarcane, with maize recently added as the fifth crop – the value of these crops is relatively low, ranging from $200 to $400 per ton.

Furthermore, much of the arable land in Pakistan is being lost to housing societies, and there is a lack of effort to develop or reclaim additional land for agriculture. This has stunted the potential for agricultural growth and exports. In contrast, countries like China, India, Singapore, and the UAE have increased their exports by importing raw materials and agricultural commodities.

Pakistani policymakers often talk about promoting value-added industries based on agriculture, but this approach is not viable without a consistent supply of local raw materials and access to imports during the off-season. In cases where a domestic crop faces a shortfall or becomes economically unviable, industries should have uninterrupted access to imported raw materials to sustain their operations. Adjusting policies to allow for these conditions can contribute to the development of a thriving agro-based industry.

Exploring New Export Opportunities in High-Value Crops

Pakistan should also capitalize on opportunities to export high-value crops. For instance, sesame seeds can be exported as hulled sesame or in the form of edible sesame oil to cater to the needs of bakeries and other food industries. By adopting an open import policy, the country can ensure a consistent supply of raw sesame seeds and promote the growth of sesame oil industries.

Exporters in Pakistan have been reluctant to invest in Export Processing Zones or take advantage of various export schemes due to cumbersome rules and regulations. Simplifying these processes and incentivizing exporters can stimulate export growth and increase the country’s competitiveness in the global market.

Reform Support Price Policies to Encourage Self-Sufficiency and Exports

The current support price policy, which focuses on wheat, cotton, and sugarcane, has failed to make Pakistan self-sufficient in these commodities. Instead, the country has had to rely on imports, leading to regular intervals of importation and elevated prices. Shifting the support price policy to focus on high-value minor crops such as oilseeds can contribute to self-sufficiency and make Pakistan a major exporter of these crops.

By abandoning outdated policies and allowing the private sector to play a more significant role, Pakistan can spur economic growth and increase agricultural and food security. Developing indigenous seeds and open-pollinated varieties will enable growers to use affordable seeds and reduce the high cost of hybrid seeds, which contribute to food inflation and elevated prices.

Addressing the Underperformance of Agricultural Research Institutes

Pakistan’s agricultural research institutes, which number around 200, have become ineffective and underperforming. Despite enjoying salaries, perks, and housing, these institutes have failed to deliver satisfactory results. The government should convene a meeting of these institutes, under the DG Green Pakistan Initiative, to revitalize their performance and ensure they contribute to the country’s agricultural growth.

Overall, Pakistan must address bureaucratic obstacles and outdated policies to unlock its economic potential. By embracing liberalization, implementing effective regulations, and fostering a market-based approach, the country can become a global leader in exports and achieve sustainable economic growth.

Source: The Express Tribune