The Lahore School of Economics (LSE) hosted its 13th annual international conference on management of the Pakistani economy at its Main Burki Campus on Wednesday.
The theme of the conference is ‘Igniting Technology led growth in Pakistan: Role of Monetary, Fiscal and Investment Policies’.
The two-day event is devoted to discussions on past successes and constraints on technology-led growth and to draw guidance on how macro and micro level policies can contribute to accelerating economic growth in Pakistan.
The conference started with a keynote address by Lahore School of Economics Rector Dr Shahid Amjad Chaudhry to set the stage for the detailed discussions held at the conference to explore how monetary, fiscal, investment and governance policies can help ignite technology-led growth in Pakistan. He remarked that the issues the conference aimed to address are very relevant to the issues confronted by Pakistan’s economy at present.
The first session of the conference focused on ensuring macroeconomic stability with micro firm level dynamism. Dr Rashid Amjad (Professor of Economics and Director, Graduate Institute of Development Studies, Lahore School of Economics) began the session with his presentation on Pakistan: How macro-micro interaction has resulted in an undervalued, underperforming economy. He emphasised the need to analyse the macro-micro interaction in the economy to fully understand the dynamics of growth and recommended that such an analysis is necessary to frame appropriate policies.
Dr Ahmed Khalid (Professor of Economics, Unversiti Brunei Darussalam) discussed the importance of financial integration and stability for sustainable economic growth. He used data on key financial and real sector indicators from 130 countries in the Asia Pacific over 1989-2013 to establish the link between finance and sustainable growth. Results show a positive and significant relationship between financial integration, foreign direct investment and economic growth for this sample.
The second session of the conference focused on monetary policy, external capital and exchange rate management. The first presentation, by Dr Inayat Mangla (Professor of Finance, Lahore School of Economics) and Dr. Kalim Haider (Senior Economist, Monetary Policy Department, State Bank of Pakistan) used quarterly data to explore the role that monetary policy can have in the presence of macro-level uncertainties such as volatile capital flows, falling remittances and declining exports.
Dr Ghulam Saghir (Assistant Professor, University of Punjab, Lahore) kindly presented research by Dr Jamshed Uppal (Associate Professor of Finance, Catholic University of America) on external debt management and capital flows. The presentation discussed recent strong growth in the financial sector of Pakistan and the how it has impacted the capital flows. The authors posit that an increase on the country’s Eurobond yields or an increase in the spread of the credit default swaps (CDS) can be taken to be a measure of the sustainability of external debt levels.
The last session of the day discussed the role of fiscal policy in economic growth. Mr Shabbar Zaidi (CA and Senior Partner, A.F. Ferguson & Co, Karachi) contended that the role of fiscal policy in Pakistan is largely of a revenue collection measure only.
The session was concluded with a presentation given by Dr Nasir Iqbal (Director of Research, Benazir Income Support Programme) on his co-authored work with Dr Musleh ud Din (Pakistan Institute of Development Economics, Islamabad) and Dr Ejaz Ghani (Pakistan Institute of Development Economics, Islamabad). In particular, they draw attention to the fiscal deficit target set under Vision 2025 and discuss if this arbitrary target is sustainable in the macroeconomic and institutional environment in Pakistan.
Discussions on the second day of the conference will focus on the role that trade openness, technology and institutions can play in job creation and equitable growth. Of particular interest is the work by Dr Azam Chaudhry (Dean, Faculty of Economics), Dr Theresa Chaudhry (Professor, Faculty of Economics) and Nida Jamil (Faculty of Economics) on the impact the 2006 Pakistan-China Free Trade Agreement (FTA). The authors will use their results to draw policy-related conclusions for CPEC related initiatives.
