Pakistan Monitor

February 28, 2011

The Role of Macroeconomic Policy in Rebalancing Growth

Filed under: Macroeconomic Reforms,Pakistan,Pakistan Economy — pakistanmonitor @ 7:28 am

 

By Peter J. Morgan
The aftermath of the global financial crisis of 2007–2009 has called the export-led growth model of Asian economies into question. This paper describes the contribution that macroeconomic policy can make to promote a rebalancing of growth away from dependence on exports to developed economies to a more sustainable pattern of growth centered on domestic and regional demand. This represents a significant departure from the traditional uses of macroeconomic policy to stabilize the economic cycle and achieve stable and low inflation. The evidence suggests that macroeconomic policy can successfully contribute to growth rebalancing. Policy measures not only can affect aggregate demand directly, but can also affect it indirectly via their “microeconomic” impacts on private sector behavior. Although in the long-term fiscal policy should be balanced to maintain government debt stability and avoid crowding out of private investment, there may be substantial scope to expand monetary and fiscal policy in the medium-term to offset the deflationary effects of an appreciating currency during periods of current account reversal. Previous experience suggests that most of the needed stimulus can be provided by monetary policy, with only a supplementary role to be played by fiscal policy. Moreover, Asian economies with large current account surpluses tend to have sufficient fiscal space.

February 20, 2011

Institutions, Entrepreneurship and Channels to Sustained Economic Growth

Filed under: Uncategorized — pakistanmonitor @ 9:50 am

Latest research paper by Pak-Haung Mo on Enterpreneurship.







February 13, 2011

Youth Engagement

Reckoning an optimistic view one may assert that harnessing youth potential can bring a socio-economic revolution in Pakistan – ‘Road to Economic Stardom’; on the contrary, if youth issues, perceptions, ideas, are not assessed and subsequently addressed in a timely manner, one may watch ‘Nightmare on Road to Prosperity.’  The aforesaid scenarios, the optimistic as well as pessimistic, have implications for public policy, which is considered important not only in the context of growing security challenges in the region, but also in the realm of seeking fair rents from knowledge based global markets. All over the world youth is being given prime importance in future policy making due to rapidly evolving knowledge base; new and emerging technologies; ever growing potential of social and economic networking in modern times; and livelihood challenges. A similar initiative has been taken at the Planning Commission of Pakistan wherein a team of 12 young professionals have been engaged to work on the New Growth Strategy.

The youth issues are being addressed in ‘New Growth Strategy’ as youth is regarded as one of the important pillars in New Development Approach (NDA) being formulated at Planning Commission. The youth engagement under NDA is looking at Pakistani youth with a ‘big picture’, a global perspective, and developing a strategy to make Pakistani youth a productive and integral part of the global knowledge based economy. The following are the objectives of the youth strategy:

  1. providing educational and other developmental opportunities to youth,
  2. reviewing policy to provide institutions and infrastructure that youth and community might need,
  3. promoting a globalized and socialized youth, and
  4. providing economic opportunities, especially for entrepreneurship, as the youth enters the labor force.

It is pertinent to mention that the youth engagement strategy shall be guided by the following principles:

  1. working with youth not only requires patience, but overcoming barriers to communication;
  2. youth engagement requires understanding of youth issues, barriers to hidden potentials, and pathways to different milestones in young people’s lives;
  3. youth requires, guidance, encouragement, recognition, and above all a chance to reveal and channel their latent energies into a positive force; and
  4. from citizens in waiting youth must be promoted as citizens in action. 

Hence, a comprehensive strategy focusing on youth education, training, volunteerism, citizenship, and entrepreneurship, in public private partnership framework, is required for engaging youth both on the supply and demand side in order to make them productive part of the society. This requires a change the way decision-makers and institutions work at all levels, including local and national. For the purpose it is imperative for the policy makers (who mostly belong to older generation) to connect with young people. Improvement in the quality and efficiency of these interactions can deliver the objectives of economic growth.

Plan of Action: Opening Windows of Opportunities for Youth

On the Supply side:  imparting essential life skills is necessary to channel youth energies into a positive force; especially skills in building team spirit, motivation, sharing ideas, problem solving, conflict resolution, assertiveness, communication and networking, managing workload, time management, decision making, and graduating from fellowship to leadership. The emphasis should be from considering young people as a problem to treating them as the most promising asset for the transforming the socio-economic landscape of the country. While providing services for youth they should be engaged in the same as well.

On the demand side more jobs need to be created through favorable policy environment. If we assume that people enter the job market at the age of 15 years, then approximately 1.3 million jobs have to be created every year for new job market entrants. This requires a conceptual framework for new economic growth, which facilitates both public and private sector in providing opportunities for a large youth population coming into the labor market over the next ten years. Planning Commission of Pakistan has been vigorously working on that and looks forward to receiving feedback from youth on its New Development Approach. Please visit download read the draft of the Conceptual Framework for New Economic Growth and give your feedback by regularly visiting Planning Commission’s blog at http://www.planningcommission.gov.pk/

Blog at WordPress.com.

%d bloggers like this: