A Growth and Adjustment Strategy for Pakistan

This paper is divided into four sections. The first provides a quick overview of the current political and economic situation, focusing in particular on the stagnation of growth and deepening macroeconomic imbalances, and a fast approaching balance...

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Bibliographic Details
Main Authors:	Burki, Shahid Javed, Hasan, Parvez
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	AGRICULTURE ARREARS AUCTIONS BALANCE OF PAYMENT BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BANK ACCOUNTS BANK BORROWING BANK FINANCING BASE YEAR BONDS BUDGET DEFICIT BUDGET DEFICITS CAPITAL ACCOUNT CAPITAL FLIGHT CAPITAL FORMATION CAPITAL GAINS CAPITAL INVESTMENTS CAPITAL REQUIREMENTS CAPITAL STOCK CENTRALIZATION COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPREHENSIVE DEVELOPMENT CONFIDENCE OF INVESTORS CONSUMER PRICE INDEX CONSUMER PRICE INFLATION CONSUMPTION EXPENDITURES CREDIBILITY CRITICAL INFRASTRUCTURE CURRENT ACCOUNT BALANCE DEBT DECISION MAKING DEMOCRACY DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT POLICY DEVELOPMENT PROJECTS DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY DIRECT FOREIGN INVESTMENT DISPOSABLE INCOME DOMESTIC INVESTORS DOMESTIC PRICE DURABLE ECONOMIC EFFICIENCY ECONOMIC EXPANSION ECONOMIC GROWTH ECONOMIC IMBALANCES ECONOMIC POLICIES ECONOMIC RENTS ECONOMIC SITUATION ECONOMIC STABILITY ECONOMIC THOUGHT ECONOMIES OF SCALE ELECTRICITY EVASION EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORT COMPETITIVENESS EXPORT GROWTH EXPORT MARKET EXPORT SECTOR EXPORT SECTORS EXPORTER EXPORTS EXTERNAL FINANCES FERTILITY RATE FINANCIAL CONSTRAINT FINANCIAL CONSTRAINTS FINANCIAL INSTITUTIONS FINANCIAL STABILITY FISCAL DEFICIT FISCAL DEFICITS FISCAL POLICIES FISCAL POLICY FIXED CAPITAL FIXED INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE RESERVES FOREIGN GOVERNMENTS FOREIGN INVESTMENT FOREIGN INVESTMENT FLOWS FREE TRADE FREE TRADE AGREEMENT GDP GLOBAL TRADE GLOBALIZATION GOVERNANCE ISSUES GOVERNMENT ACCOUNT GOVERNMENT EXPENDITURES GOVERNMENT PAPER GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SAVINGS GROSS FIXED CAPITAL FORMATION GROWTH RATE GROWTH RATES HOUSEHOLD INCOME HUMAN DEVELOPMENT HUMAN RESOURCE HUMAN RESOURCES INCENTIVE STRUCTURE INCOME INEQUALITIES INCOME SUPPORT INCOME TAX INCOMES INFORMATION TECHNOLOGY INFRASTRUCTURE DEVELOPMENT INSTRUMENT INTEREST PAYMENT INTEREST PAYMENTS INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL DEVELOPMENTS INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL TRADE INVESTMENT ANALYSIS INVESTMENT CLIMATE INVESTMENT REQUIREMENTS INVESTOR CONFIDENCE JOB CREATION LABOR MARKET LANDOWNERS LEVIES LEVY LICENSES LIQUIDATION LIQUIDITY LOCAL GOVERNMENT LOCAL GOVERNMENTS LONG-TERM COST LONG-TERM LOANS LOSS OF CONFIDENCE MARKET SHARE MICROFINANCE MOBILE PHONE MONEY MARKET NATIONAL FINANCE NATIONAL INCOME OIL PRICES ORGANIZATIONAL STRUCTURE OUTPUT OUTPUT RATIO OUTPUT RATIOS PENSION PERSONAL INCOME POLICY RESPONSES POWER OUTAGES PRIVATE INVESTMENT PRIVATE SAVINGS PRIVATE SECTOR PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR INVESTMENT PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PROVINCIAL GOVERNMENTS PUBLIC PUBLIC ACCOUNTABILITY PUBLIC ASSETS PUBLIC AUCTIONS PUBLIC COMPANIES PUBLIC ENTERPRISES PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEWS PUBLIC EXPENDITURES PUBLIC FINANCES PUBLIC INVESTMENT PUBLIC POLICIES PUBLIC POLICY PUBLIC SECTOR PUBLIC SECTOR INVESTMENTS PUBLIC SERVICE PUBLIC SERVICE DELIVERY PUBLIC SPENDING PUBLIC WATER SUPPLY PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS RAPID EXPANSION RATE OF GROWTH RATE OF INVESTMENT RATES OF INFLATION REGULATORY AGENCIES REMITTANCES REPAYMENT REPAYMENTS REPUTATIONS RETURN ROADS RULE OF LAW SETTLEMENT SMALL BUSINESSES SOCIAL DEVELOPMENT STATE ASSETS STATE BANK STRUCTURAL PROBLEMS TAX TAX COLLECTION TAX COLLECTIONS TAX POLICY TAX RATE TAX REVENUE TAX REVENUES TAX SYSTEM TAXATION TERRORISM TIMELY PAYMENTS TRADE BALANCE TRADE DEFICIT TRADE POLICY TRADING TRANSPARENCY VALUE ADDED WAGES WITHDRAWAL WITHHOLDING TAXES WORLD TRADE
Online Access:	http://documents.worldbank.org/curated/en/2013/06/19311558/growth-adjustment-strategy-pakistan http://hdl.handle.net/10986/17856

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Summary:	This paper is divided into four sections. The first provides a quick overview of the current political and economic situation, focusing in particular on the stagnation of growth and deepening macroeconomic imbalances, and a fast approaching balance of payments crisis. The second section focuses on ways to improve macro-economic balances especially public finances not only by increasing revenues but restructuring expenditures including reductions in subsidies to the non-poor and increasing the effectiveness of public spending. The third section focuses on critical elements in reviving growth. The paper argues for a comprehensive growth strategy which focuses on governance as a central issue. Reversing the decline of public institutions and improving the quality of governance will provide confidence in the country's economic future and will result in increasing domestic investment. Other elements of the strategy must involve improving the energy situation; correcting the long neglect of exports and using international trade as a driver of growth (including opportunities that may become available by the intended normalization of trade with India); reversing the decline on growth rate of agriculture both by supporting diversification in the cropping pattern; processing of agricultural products, and more economical use of inputs (especially water); a new push on human development including quality of education in public schools, skills training and a new emphasis on adult literacy; and, a new compact with the private sector that phases out economic rents, reduces the burden of unnecessary or ineffective regulation not excluding labor legislation, and strengthens incentives for investment and productivity improvements especially in moving up the value added chain. Finally, the fourth section presents a summary of key actions that government could take along with a timeline for implementation.

A Growth and Adjustment Strategy for Pakistan

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