Economics Commons^™

Value Chain For Quality Education, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Congratulations for organizing this international conference. So my thanks to the organizers for taking very important initiative. I also would like to place on record my appreciation for Nisar Siddiqui and the faculty and students of Sukkur IBA who have really done a marvelous job in turning around this institution through their dedication and hard work. . IBA Sukkur being located in a backward area of the province of Sindh has its own disadvantages. That you have maintained high standards of education and produce quality graduates from this institution is a remarkable feat which very few organizations institutions can achieve. …

Value Chain For Quality Education, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Congratulations for organizing this international conference. So my thanks to the organizers for taking very important initiative. I also would like to place on record my appreciation for Nisar Siddiqui and the faculty and students of Sukkur IBA who have really done a marvelous job in turning around this institution through their dedication and hard work. IBA Sukkur being located in a backward area of the province of Sindh has its own disadvantages. That you have maintained high standards of education and produce quality graduates from this institution is a remarkable feat which very few organizations institutions can achieve. I …

Urbanization In Pakistan, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Economic theory suggests that Structural transformation usually takes place when resources are reallocated from low productivity agriculture to high productivity industry and services sectors. Cities and urban areas are the magnets for location of these sectors which benefit from migration of the surplus and underemployed labour. Rapid economic growth is therefore associated with urbanization. The pace of urbanization is, in turn, accelerated with a larger response of migration. Empirical evidence shows that no country has grown to middle income status without industrializing and urbanizing. None has grown to high income without vibrant cities. Between 1980 and 1998, 86 percent of …

What Ought To Happen In 2014?, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Prime Minister Nawaz Sharif has set out the agenda for 2014 by focusing on energy, extremism, economy, ‘trade not aid’ and governance. These are the right issues – very critical and linked together. But how can this agenda be implemented?

For each of these issues, responsibilities should be assigned, performance indicators specified and accountability for results established. This will enable the prime minister to assess the performance of his ministers and secretaries.

Policy credibility has been a casualty for too long and needs to be established. Tough policy decisions have to be taken in consultation with stakeholders prior to …

Inefficiency In Exports, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Pakistan’s merchandise exports have declined from 0.18 percent in 1990 to 0.14 percent of the world export market in the last twenty five years. India’s share has tripled from 0.57 percent to 1.78 while Bangladesh’s share has risen from 0.05 percent to 0.14 percent in the same period. Pakistan’s exports, which used to be only one third of India, have fallen to one tenth and Bangladesh, which used to lag behind with its exports being only one third of Pakistan’s in 1990, exceeded our exports level last year. At the turn of the millennium, 97 percent of merchandise exports used …

Stability With Growth, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The stabilisation vs growth debate has been sparked by concerns that Pakistan is entering its sixth year of stagnating incomes and can no longer afford to tread the same path.

Further doses of macroeconomic stabilisation as reflected in the current arrangement with the IMF, will make ordinary lives more difficult. Proponents of stabilisation argue that fiscal prudence and monetary tightening will reduce imbalances in fiscal and current accounts, paving the way for the resurgence of economic growth.

Both arguments are partially true but there are ways in which macroeconomic stability goals with the resumption of growth can be managed.

Fall Of The Rupee, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Why is the Pakistani currency depreciating so rapidly vis-à-vis foreign currencies? How can this trend be arrested? What is the future outlook for Pakistan’s currency? These questions must be addressed in a dispassionate manner.

Economic theory has many explanations for relative currency movements. The simplest one is that if country X records the inflation rate at 10pc per annum while country Y’s is only 2pc, the bilateral exchange rate of country X should result in depreciation of 8pc vis-à-vis country Y.

Hardly any country has economic ties with only one country. Therefore, a trade-weighted exchange rate is used where weights …

The Nexus Of Human Capital And Governance, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Pakistan’s popular economic discourse has been rightly focused on short-run problems. Will we be able to end load-shedding in the country? Will the IMF agreement cause more hardships than benefits to the people? Will the inflation rate begin to rise again? Will the rupee keep on tumbling? These are legitimate questions that need to be addressed. The government of the day also devotes its attention towards these problems as the test of their success lies in finding solution to these issues.

Neglected due to this pre-occupation with short-term problems are the issues that will impinge upon the future of this …

I&M Exclusive Interview: Dr. Ishrat Husain, I&M

Faculty Research - Newspaper and Magazine Articles

Dr. Ishrat Husain, we admire your extraordinary contributions to the development of Pakistan's economy in very senior government positions and as an economist through your writings and speeches. You have enriched the proceedings of many conferences and seminars with your presentations and speeches. Today, throughout Pakistan, you are respected for your wisdom and you are a source of inspiration for young professionals.

Pakistan's Policy-Performance Gap, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

In Pakistan, the policy-performance gap has been a source of great disillusionment and despairs among the public at large. It’s even been responsible for the downfall of many governments in the past.

At the highest level, the people of Pakistan have given their verdict by electing political parties and candidates in whom they have reposed hope for better performance in the future. This exercise repeated every five years without any interruption is crucial for the process of good democratic governance in the country. The purging of the candidates and parties who do not measure up to the expectations of the …

Microfinance For Inclusive Growth, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Why Microfinance? Why separate Microfinance Institution (MFIs) from other financial institutions? My answer is that Capital markets in developing countries are imperfect and poor are unable to access these markets. Thus to address this ‘market failure’ and provide avenue for low-income families to access financial service the MFIs have to be set up separately from commercial banks. There is a clear ‘public good’ element associated with Microfinance and hence the role of the Government intervention in this sector becomes justifiable compared to commercial banks where the Government is ought to be confined to regulator and supervisor only. This other distinguishing …

Explaining China’S Economic Performance From The Perspective Of Non-Conventional Determinants, Jingjing Yang, Sana Khalil

Business Review

We analyze forecasts concerning China’s growth slow-down and future prospects concerning its economic performance. Extending the discussion on China’s possibility of going through a slow-down in future, we focus on the avoidance of such a possibility by drawing forth the role of gross capital formation, trade openness, higher education enrollment ratio, higher education expenditure, R&D expenditure, population growth and number of inventions in determining per capita income. These non-conventional determinants: number of inventions, government R&D expenditure, higher education enrollment ratio and higher education expenditure, show not only significantly positive link with per capita income but also exhibit strong explanatory power …

In Search Of A Foreign Economic Policy, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

There hasn’t been any attempt in Pakistan so far to articulate, coherently and comprehensively, the contours of Pakistan’s foreign economic policy. On the other hand, making sense of the bits and pieces of scattered statements and pronouncements can be a highly subjective exercise.

In designing foreign economic policy we should always keep in mind that such a policy would be a by-product of the country’s larger foreign and domestic economic policies. For example, if foreign policy with one particular country or group of countries is silent, ambivalent or agnostic then a foreign economic policy cannot be built upon strong economic …

Study Of Economic Development Of Pakistan Through Stock Market: Causal Relationship Of Stock Prices And Macroeconomic Indicators, Rizwan Raheem Ahmed, Yaseen Ahmed Meenai, Fazal Hussain

Business Review

The purpose of the research is to examine the causal relationship between stock prices and the variables representing the real sector of the economy for example real GDP, and real investment, in Pakistan. In this study, annual data is used (quarter-wise) from December 1980 to June 2007 and the correlation analysis has been applied, to investigate the relationship. For better understanding of the Market’s Behavior, data has been grouped in to Liberalization periods; Preliberalization and Post-Liberalization. The stock market in Pakistan provides an average quarterly return of 2.86%.The average annual growths in real variables are just lower than 1% for …

Impact Of Eu Crisis On Saarc Countries, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

It is a matter of honour and privilege for me to be invited to share my thoughts with this august gathering of SAARC Governors. I wish to thank the Governor State Bank of Pakistan Mr. Yasin Anwar for providing me this opportunity. I would like to begin by briefly tracing the origin of the crisis of 2008/09 and then presenting the evidence about the changing role of Emerging and Developing Economies (EDEs) in the aftermath of the crisis. I would then turn to the subset of SAARC countries and see as to how much they were affected by this crisis. …

The Imf Dilemma, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Pakistan borrowed nearly $8 billion from the IMF under its standby facility during 2008 and began repayments in 2011. The amount together with interest must be repaid by end 2014 — almost $5bn must be paid between March 2013 and end 2014.

A debate is raging between those who believe there is no alternative to entering a fresh programme with the Fund — standby or the Extended Fund Facility — and others who want to shun the IMF. To the former, the short-term liquidity situation leaves little choice.

Others believe the new government’s room for maneuverability will be constricted by …

Swallowing The Bitter Pill, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The incoming elected government, upon assumption of office, will have a myriad of pressing issues to resolve. One of its immediate tasks will be to formulate and announce the national budget. Along with the budget, the government will be well advised to announce an economic policy direction statement. This should sketch out the broad contours of economic policies and institutional reforms they propose to carry out during their tenure. This statement is critical to inform the domestic and foreign investors, who have been in a ‘wait and see’ mode for quite some time, about the overall policy framework. Uncertainty has …

South Asia: Potential For Development, Ishrat Hussain Dr.

Faculty Research - Talks, Speeches, & Discourse

South Asian economies have grown rapidly during the last two decades recording an average growth rate of 6 percent annually. The rate had accelerated in the early 2000s to 7 percent before coming down in 2008, and 2009. Before the global financial crisis in 2008, India's growth rate was a staggering 9 percent and Pakistan, Bangladesh and Sri Lanka around 7 percent. Consequently, the Incidence of poverty declined to 10 percentage points or more in India, Pakistan and Bangladesh.

Reviving An Ailing Economy, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Many hearts were broken the night Dr Ishrat Husain’s nomination for the caretaker prime minister failed. With long tenures in the civil service of Pakistan as well as the World Bank, his professional credentials were impeccable to begin with. That he managed to spearhead a series of critical reforms at the State Bank of Pakistan while he was governor was impressive but more so was the fact that his integrity remained free of the taint that came to be associated with military ruler Pervez Musharraf. Finally, Husain has been working on a plan for the economic revival of Pakistan for …

An Agenda For Reviving Islamic Finance, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

Islamic Finance is still a small player in Global Financial System with a share of less than 2 percent. The growth has been impressive but the takeoff has been bumpy. The vision of Islamic Finance is to offer itself as a source of stability to the Global Financial System that is coming out of a crisis of gigantic proportions –next only to the Great Depression of 1930s. If Islamic Finance can demonstrate that its unique and distinctive features and asset-backed transactions are able to reduce the fragility and volatility of the financial system in a convincing manner then there would …

‘Big Bang’ Opportunity, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The proponents of “big bang” reforms argue that the latter will bring about a fundamental shift in people’s expectations about the future by altering the existing structure of the economy. Detractors say that the resulting dislocation to the economy and uncertainty will do more harm than good. The capacity of the state to implement so many sectoral and micro-economic reforms simultaneously is limited and therefore the risks of failure are high. They point to the sale of state-owned assets at rock-bottom prices to a group of Russian oligarchs — a direct result of hasty, ill-prepared and opaque privatisation. Faced with …

The Youth Bulge, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The focus on short-term economic difficulties – the fiscal deficit, inflation, the exchange rate and foreign exchange reserves – is rendering us oblivious to an impending human resource crisis. There is barely any awareness or realisation of this, among public policy makers or even opinion makers.

Normalizing India- Pakistan Trade Relations!, Ishrat Husain

Faculty Research - Talks, Speeches, & Discourse

India and Pakistan, the two largest economies in South Asia, have enjoyed very little trading relations for past four decades. The intransigency between these two countries has had deleterious effect on intra-regional trade flows within the South Asia region. Consequently, the region remains the least integrated region of the world. The foregone benefits to the people inhabiting these countries of South Asia are substantial. The correlation between trade, economic. growth and poverty reduction has become quite evident in the last few decades. Unlike export pessimism literature, the ascendancy of China, a developing country, that despite having a large internal market …

کھل کے تجارت ہونے دو, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The article discusses the prospects and challenges of opening up trade between Pakistan and India, noting that despite proximity and large market potential, both countries have not benefited fully from bilateral trade due to restrictive lists and non-tariff barriers.

Trading With India, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The last one year has seen many positive developments vis-à-vis India. Pakistan earned huge goodwill by granting Most Favored Nation (MFN) status to India and replacing the positive list of imported goods by a negative list. This negative list is also to be phased out by December 2012, paving the way for the South Asia Free Trade Agreement (SAFTA) that has been hostage to India-Pakistan relations, which had – in turn – hurt intra-regional trade.

How To Build Trust, Ishrat Husain Dr., Kavita N. Ramdas

Faculty Research - Newspaper and Magazine Articles

This week, a delegation consisting of heads of leading Pakistani business houses are visiting India. They are being hosted by the Confederation of Indian Industry (CII) and will meet with ministers and senior officials of the Indian government. At the heart of their conversations is an intriguing and innovative proposal — the formation of a Joint Business Council that can act as a dispute resolution body for Indian and Pakistani businesses engaged in bilateral trade. This marks a genuine departure from the traditional reliance on bureaucracies and is a significant step forward in building mutual trust that has been deficient …

Economic Reforms In Pakistan: One Step Forward, Two Steps Backward, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

In 1998 I was invited by Dr. Sarfraz Qureshi, the then Director of PIDE to deliver a lecture on “The Political Economy of Reforms: A Case Study of Pakistan” . This lecture was subsequently published by PIDE as a monograph. A year later, in December 1999 I had the honour of becoming the Governor of the State Bank of Pakistan and actually participated actively in the formulation and implementation of economic reforms. During the six year period of public policy making I realized that my knowledge about the political economy as manifested in my PIDE lecture was incomplete. The narrative …

Politics Versus Economics, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

A question often asked is that when current economic ills have been diagnosed and we know what needs to be done, why doesn’t it happen? The reason is the inherent disjuncture between the political risks a ruling party is willing to take and the economic rewards accruing through prudent economic management that will take care of these economic ills.

This asymmetry between the incurrence of the costs and the appropriation of benefits lies at the heart of the non-reformist stance of democratically elected governments. India – the largest democracy in the world – has recently been faced with a similar …

Education And Just Development, Ishrat Husain Dr.

Faculty Research - Talks, Speeches, & Discourse

I wish to commend the TCF Chapter of Seattle for organizing this Fund raising event and for the past efforts they have made in sponsoring several TCF schools in various parts of the country. Overseas Pakistanis have proved to be a big supporter of TCF in its operations and expansion. Both the attendance at today's event and your enthusiastic response have inspired me.

The Economics Of Corruption, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The recent tragedy in which 258 innocent persons lost their lives in a fire that gutted a garment factory in Karachi has once again generated a controversy in the media about the widespread collusion and corruption prevalent in the departments dealing with safety, occupational hazards, building control, labour inspection and others. Road-worthiness certificates are issued to defective motor vehicles, approvals for buildings are given for structures without fire protection, CNG tankers ply on the roads without following safety regulations, electricity connections are granted without adequate safeguards, adulterated foodstuff and drugs are sold liberally without let or hindrance. The usual blame …