Growth and Development Commons^™

Shaping Pakistan's Future, Sdsb 360 Magazine

Faculty Research - Newspaper and Magazine Articles

SDSB 360 is in conversation with Dr. Ishrat Husain, an influential Pakistani banker, economist, and reformer whose leadership has shaped Pakistan’s financial landscape. From steering the State Bank of Pakistan (1999–2006) to driving educational excellence as Dean of IBA Karachi (2008–2016) and championing institutional reforms as Advisor to the Prime Minister (2018–2022), Dr. Husain’s career is a testament to visionary leadership and a relentless pursuit of progress.

Home-Grown Economic Plans, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The government recently formed a committee of eminent international and Pakistani economists to draft a home-grown economic programme. This article shows that there is little need for such a committee. There is no dearth of reports, recommendations, cabinet decisions and plans prepared by the government itself as well as international development partners, private sector organisations, academic institutions, think tanks and professional bodies which cover all aspects of a home-grown programme. Numerous books, articles, op-ed pieces, webinars, seminars and conferences have also provided many proposals. This piece confines itself to the last six years. During this period, the management of the …

Sartaj Aziz: Public Service Embodied, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

He was passionate about agriculture development, mitigation of rural-urban income inequality, absorption of new entrants to job market Very few Pakistanis have made a name for their significant contributions on national and international fronts and are admired for their personal attributes. Sartaj Aziz was one of them – an active student leader during the freedom movement, a civil servant par excellence, an international mover and shaker, a politician of integrity and stature, and an academic of high calibre.

A Look At Provincial Budgets, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Budget discussions and debates in Pakistan have historically focused on the federal government and FBR, though the provincial budgets should occupy a salient place in the aftermath of the 18th Amendment and the 7th National Finance Commission Award. This has not been the case despite the fact that the objectives of raising the tax-to-GDP ratio and efficient and effective delivery of public goods and services to the citizens can be achieved mainly through provincial budgets.

Comment : Economic Consequences Of Budgetary Options, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Let me first concede that I have great deal of sympathy with those who have been given the responsibility for preparing the FY24 Budget. We are faced with the most difficult external and domestic circumstances. Global economic conditions and geopolitical compulsions are unfavourable.

Reviving Agricultural Growth : Part - Vi, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Pakistan will have to develop a unified market linking the farms to retail outlets covering the full supply chain particularly in high-value commodities. Corporate investment and competition in on-farm storage, refrigerated vans and specialized trucks, silos and warehouses, wholesale distribution channels supplying to the processors, and opening up the highly inefficient and regulated marketing will eliminate the excessive rents earned by those involved in the present arrangements. This ‘unearned’ premium under a reconfigured modern value chain bolstered by competitive forces will then accrue to the farmers and the consumers while acting as a restraint on food inflation.

Reviving Agricultural Growth : Part - V, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Mechanization, technology and advisory services: one of the major constraints facing small holders is the lack of resources and knowledge about modern practices to adapt techniques of production using mechanization. The intensity of the use of machinery and implements by large farmers is one of the factors responsible for the wide differential in the productivity attained on their farms compared to that on small farms. A number of agritech companies have sprung up in the country but they are also mostly catering to the well-to-do and educated farmers, thus causing anxiety that this will further widen the productivity gap.

Reviving Agricultural Growth : Part - Iv, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Import substitution and export promotion: agro-based exports (food, textile, leather groups) fetch 75-80 per cent of total earnings but the direct exports of agricultural commodities are limited to only $5 billion, dominated mainly by rice. On the other hand, food and agricultural imports have risen to $10 billion creating a deficit on food and agriculture trade balance of $5 billion annually. One of the main reasons is that cotton imports have become a consistent feature for the last several years as domestic production has taken a dive drastically since Bt cotton has been introduced through theft, plagiarism and without safeguards. …

Reviving Agricultural Growth : Part - Iii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

At present, the canal irrigation management system recovers only a quarter of its repair and maintenance costs. In the 1970s, the entire cost was recovered by these water charges called ‘abiana’. The present average rate of surface water charges per acre is only one-fourth of what the farmer pays for tube wells and so it is not the ability to pay constraint. Flat water pricing or uniform water charges rather than usage based on volumetric measures militate against the adoption of high efficiency irrigation technologies and conservation of water. Punjab used to charge a flat rate of Rs 135 per …

Reviving Agricultural Growth : Part - Ii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The question we have to address is: what can be done to boost the productivity of 88 per cent of the farms that own less than 12.5 acres of land and cultivate 45 per cent of total farm area. The highest yields achieved per acre on farms of progressive large farmers (more than 50 acres) is nine times that of small farms and four times that of medium farmers (12.5–50 acres). This gap between potential and actual productivity is to be reduced in order to raise the national average yield of crops and livestock.

The Future Of Our Economy - Part I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The future of any economy is closely linked with its present and the past. Pakistan’s economic past has gone through different phases with impressive growth and poverty reduction in the 1960s, 1980s, 2000-2007 and 2014-16, and 2020-22. The immediate precarious situation where both consumer and business confidence are at the lowest ebb, international ratings and market sentiment are negative and foreign exchange constraints are binding, if projected into the future and discounting the past, may result in an extremely dismal outlook. Should the present assumptions be carried forward as they are? Would these circumstances – both external and internal – …

India’S Economy At 75 : Part Iii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Despite impressive achievements since 1991, India is facing several major challenges. A major problem is absorbing its youth in a productive labour force and finding gainful employment for them. Half of its population is under the age of 25. Only 35 per cent of the working age population has a job while 12 million new entrants would enter the labour force every year. The past record in labour absorption, despite impressive economic growth, has not been stellar. The great divide between the organized and unorganized parts of the economy is growing. Ninety per cent of the jobs are in the …

India’S Economy At 75 : Part Ii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

India’s success factors may be many but three salient features need emphasis. First, Indian entrepreneurs are dynamic, vibrant and innovative. They even used the socialist economy regime of control and license raj for ‘learning by doing’. Just to give an example, India had a ramshackle automobile industry dominated by two outdated models until the 1990s. The suppliers, engineers, vendors, parts manufacturers did acquire the techniques of supply chain management, production and distribution under most adverse circumstances. When the economy did open up in the post-1991 period and the private sector allowed to set up manufacturing industries without prior approvals, among …

India’S Economy At 75 : Part I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

India was considered by its colonial rulers as the brightest jewel in the British crown as it was relatively well-endowed in terms of natural and human resources, physical infrastructure, and entrepreneurship. India’s social and economic indicators at the time of independence were similar to those in the countries of Southeast Asia and China in terms of level of poverty, illiteracy, and health status. When independence was achieved, continuity with the past was least disrupted as the majority of the experienced civil servants who administered British India opted to serve the newly independent country. Another advantage was that the political party …

Seventy-Five Years Of Pakistan’S Economy, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

A large majority of Pakistan’s population was born after the country got its independence. The median age today is 23 years and the youth have only experienced economic difficulties and hardships in their lifetime. They are hardly aware of the glory days of Pakistan. Despite the many articles that have appeared on this subject, it is essential to make them aware of the historical context in which they are today leading their lives. At the time of independence, the prospects of the economic survival of a ramped Pakistan appeared quite dim as it inherited an extremely weak and fragile economy. …

High Time To Live In The Modern World, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

At the time of independence, Pakistan had no industry worth its name and therefore the corporate sector, even in its rudimentary form, was non-existent. The government, therefore, had to play a catalytic role in nurturing the development of the private sector by pursuing policies that protected the newcomers from international competition.

Repairing Provincial Finance, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Most of the discussion and discourse on public finances has remained focused on the federal government and FBR. The analysis of provincial finances has been sketchy and shallow, although it should occupy a salient place in the aftermath of the 18th Amendment and 7th National Finance Commission Award. It has been a decade now since the provincial governments have enjoyed both administrative, legal, and political autonomy and a large dose of injection of financial resources out of the divisible tax pool.

The Sri Lanka Paradox : Part – Ii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Sri Lanka recorded a rapid increase in public debt-to-GDP ratio to 119 per cent from 42 per cent over a few years. Access to the international capital market was lost, export earnings plummeted, and import payments swelled up due to global price increases, prompting depletion of foreign exchange reserves to critically dangerous levels. Export earnings from tourism – which were $4.4 billion in 2018 or 5.6 per cent of GDP – dipped to 0.8 per cent of GDP. Remittances started drying up too, shrinking from $612 million in April 2021 to $205 million by February 2022. Petroleum prices tripled from …

The Sri Lanka Paradox : Part – I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Sri Lanka has long been admired by development economists, international financial institutions, and public intellectuals for leading South Asia in all economic and social indicators. Per capita income of $3853 in nominal terms (almost twice as much as India’s) and $12850 in PPP dollars, poverty headcount (measured at $1.90 per day) less than one percent of the population and multidimensional poverty of 16 per cent placed the country ahead of every other country in the region. Sri Lanka was the first one to pursue economic liberalization, as early as 1977, by introducing a less restricted foreign trade and investment regime …

Rebuilding Human Capital, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

When countries face short term financial crisis it is natural that more deep rooted and important issues are neglected perpetuating the cycles of economic instability from time to time. It may appear to be a hoarse cry at this stage when our attention is focused on agreement with the IMF, finding resources for our external financing requirements, rapid depreciation of rupee, foreign exchange reserves, debt servicing payments, FBR revenues , to raise questions that span medium or long term time horizon. Given the changing nature of our external environment if we do not prepare ourselves for meeting the future challenges …

Sir : Save, Implement And Review, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The new coalition government has assumed power at a time of deep external and internal economic difficulties in the midst of a highly-polarized polity and society. The immediate temptation would be to distance itself from what the previous government had done and formulate a brand new package of initiatives. Unfortunately, this tradition is to be broken as it has always proved counterproductive and instead of remedying, it only aggravates the economic situation. In such uncertain times, sensible policy decisions need to be taken immediately to reassure the international financial community (institutions, credit rating agencies, bond markets and foreign investors), trading …

A Skeptic’S View Of International Development, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The UN agencies and the development community have rejoiced at the successful completion of the 2015 summit that launched the 17 Sustainable Development Goals (SDGs), with 36 topics and 169 targets to be achieved by 2030. No doubt, the SDGs put a spotlight on some of the world’s biggest issues such as globalisation, rising urbanisation, new demographic patterns, technological revolution and climate change, which are likely to disrupt our lives in the next 20‐30 years. It is but natural that global leaders should have put their heads together and come up with plans and actions to mitigate the adverse impact …

Public-Private Partnerships, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

There is unanimity of view that Pakistan faces enormous deficiencies in its infrastructure, particularly the energy sector, that is slowing down the rate of growth and creating stress and disenchantment among business and society. It is also true that the federal Public Sector Development Programme does not have enough fiscal space to accommodate all priority projects. At the same time, there is a buoyant private sector that is sitting on ample cash surpluses and looking for profitable opportunities. So there is a demand for infrastructure projects and there is supply of resources available from investors willing and able to finance …

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.

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 …

‘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 …

Maximising Benefits, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The recent moves to devolve some of the functions and responsibilities of the federal government to the provinces through the 18th Amendment and the decision of the National Finance Commission (NFC) to allocate a larger portion of divisible tax pool to the provinces are highly commendable. These steps have the potential to overcome some of the structural difficulties and micro-economic distortions that have been keeping Pakistan as an underachiever economically and socially. In a multi-ethnic and multi-linguistic society, with one of the federating units being much advanced and enjoying political dominance, de-concentration of powers and equitable sharing of resources among …

Shared Growth, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

A number of media persons and commentators were pooh-poohing Pakistan’s impressive growth record between 2002-08. The criticism against the previous government ranged from the insinuation of fudging the numbers and faking the growth rate to the other extreme where it was acknowledged that growth had indeed taken place but it was making the rich richer and the poor poorer. The same groups are now assailing the democratically elected government for a dismal showing on growth rate. It seems that we as a country can never get it right. You are damned if you do it and damned if you don’t …

Pakistan And Indian Economies – Sixty Years Later, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Pakistan and India both achieved independence in 1947. At that time there was a great deal of skepticism among the Indians as well as the foreigners about Pakistan’s economic future. They wondered as to how a country so poorly endowed, heavily bruised by the pangs of partition, separated physically by 1000 miles across a hostile territory could survive politically and economically. It is true that the political union of the two wings of the country could not be sustained but the emergence of two independent nations out of Pakistan in 1971 did not in any material way adversely affect the …

Banking For The Poor, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

In 1974 a young economic professor of Chittagong University just returned from the U.S after his doctorate in an exoteric topic when the famine struck Bangladesh. He approached the people of a village nearby the University as to how he could help them and discovered that their biggest problem was they were so heavily indebted to the moneylenders that they had almost lost their freedom of individual action. The moneylenders were charging exorbitant rates of interest that were multiplying the outstanding amount exponentially beyond the capacity of the poor villagers. He offered to provide his own personal funds to them …