LAHORE: Former finance minister Salman Shah says the current financial crisis in the country started in 2016.

“It has so far sent four prime ministers and seven finance ministers out of power. We are still not sure whether the financial troubles of the country will end here or not,” he was speaking at the session, “State of economy in Pakistan and way forward,” moderated by Aqdas Afzal at the Pakistan Literature Festival on Sunday.

Mr Shah said that in the last one year, the country’s reserves have been reduced from 17bn USD to 3bn USD, which was a failure of all finance ministers. “Even after signing a deal with the IMF, we have to open discussions with China, which is our real creditor, as we owe it 10bn USD this year and the same amount next year.”

Mr Afzal said the current rate of inflation in the country was about 28pc, the highest in the history of the country, which could go up to 35pc to 40pc in the coming months. The current rate of inflation might send 200m more people below the poverty line while economic growth was dismal 2pc. “From June onwards, our foreign reserves would be so low that we might have to go to the IMF once again,” he apprehended.

Mr Shah said the current IMF programme was 23rd, 22nd was in 2018 while 21 was completed in 2016.

“The issue is that Pakistan has never done economic reforms. This is why we (the country) survive for sometime as we get some (help) due to our geopolitical position as we get some importance due to Afghanistan. Once out of crisis we forget reforms, which means making our economy sustainable without boom and bust.”

In the last 50 years, the former finance minister said we have taken part in Afghanistan’s war, first 30 years in the Afghan Jihad and then the War on Terror, which is rearing its head again.

“We need dollars because our economy is inward looking and disconnected from the world. We consume whatever production we make and even imports, which mostly consist of energy. Earlier we used to import only energy but now we have started importing electricity.

“We have an inward looking economy dependent on imports which can’t be run smoothly for long. There are two solutions, either to make the economy export-oriented or make it self-sufficient, particularly regarding energy. We have not done either of them. There was a time, we had surplus energy due to dams whose by-product was electricity.”

Mr Shah pointed out that dam projects fell to politics and dams stopped and we started getting energy from the IPPs. The IPPs were not ready to work to Pakistan and they were lured by the highest price. This made electricity so expensive that it’s not affordable either for commerce or the layman, he added.

Zafar Masood, president and the CEO of the Bank of Punjab (BoP), said Pakistan was having shrinkflation too which meant that on the one side, the prices of products were increasing while on the other, their size was decreasing. The impact of shrinkflation was felt everywhere, even at the service sector, as our resources are shrinking along with affordability, said Masood who called for a sustainable basis before talking about aggressive growth.

Dr Faisal Bari, the dean of School of Education at Lums, stressed on education to get out of the crisis once and for all. He said there should be more investment in education, giving examples of Japan and South Korea, adding that development was impossible without education. He said 20 to 25 children were out of school though the country had included education in the basic rights.

EDUCATION: Dr Tariq Rahman the policy that all universities should produce research should end as most of them produce fake research. He said there should be fewer universities dedicated for research as the number of people that Pakistan universities had could not do research. He said there should be university colleges headed by principals just like the UK and the US. He was replying to the questions of Dr Jaffar Ahmed in a session, Taleem Ka Safar, at the PLF.

Dr Jaffar pointed out that once hired the lecturers in colleges mostly won’t add to their knowledge or do research in their 30 or 35 years teaching and there was no system to hold them accountable.

Dr Tahir Kamran said it was impossible to hold the teachers accountable in public universities while the situation was completely opposite in the private universities that were at the other extreme end. “Pakistan education system lacks as our knowledge is not based on our own classics. As a result, the students remain suspended mid-air. If they read Rumi, they read him in English translation,” he added. He endorsed Dr Rahman that the undergrad programmes needed to be made more robust instead of producing fake research. Instead of setting up four universities in each district, he suggested that there should be six universities in the whole country under government control for research.

Dr Shahid Siddiqui said the number of universities in Pakistan had increased significantly in Pakistan. In the last two years, 50 new universities charter had been approved though earlier universities were lacking funds. Instead of improving already established universities, we are setting up new universities on the basis of politics.

He said we are producing such PhDs as were worthless and there was not demand for them. “We are just producing PhDs for fill job slots without making any contribution to the development of the country,” he pointed out.

Published in Dawn, February 13th, 2023