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Prime Minister Shehbaz Sharif has recently taken a decisive step in Pakistan’s economic planning by delegating the responsibility of developing a “home-grown economic development plan” to Deputy Prime Minister Ishaq Dar. This move comes after expressing dissatisfaction with the draft prepared by UK economist Stefan Dercon.
Formation of Ministerial Committee
A notification from the Prime Minister’s Office announced the formation of a seven-member ministerial committee, chaired by Ishaq Dar, to critically review the draft of the Dercon Plan. The committee includes notable figures such as Planning Minister Ahsan Iqbal, Finance Minister Muhammad Aurangzeb, and Minister for Economic Affairs Ahad Khan Cheema, among others. Lt General Sarfraz Ahmad, the national coordinator of the Special Investment Facilitation Council (SIFC), will also serve as a member of this newly constituted committee.
Criticism of the Dercon Plan
Stefan Dercon, a former policy advisor to the UK’s Foreign Commonwealth and Development Office (FCDO), was initially hired to draft a growth agenda for Pakistan. However, the plan reportedly failed to offer any groundbreaking solutions and largely reiterated well-known ideas. This led to criticism from independent economists and analysts, questioning the necessity of engaging a foreign expert for what many viewed as a lackluster output.
Focus on PML-N’s Economic Vision
The newly formed committee, under Dar’s leadership, has decided to root the government’s economic strategy in the Pakistan Muslim League-Nawaz (PML-N)’s election manifesto and existing government plans. The PML-N has pledged to bring inflation down to single digits by the end of fiscal year 2025 and to further reduce it to a range of 4% to 6% by 2029. Additionally, the party aims to lift approximately 40 million people out of poverty through annual GDP growth of 6%.
Future Economic Strategy
The committee’s primary task is to refine the Dercon Plan in alignment with PML-N’s vision, focusing on actionable and cohesive strategies that reflect the country’s economic realities. While the Dercon Plan emphasized the need for private investment, export orientation, and fiscal discipline, the government appears more committed to its manifesto goals and the Planning Commission’s 5Es framework.
Conclusion
The government’s decision to shift the responsibility of economic planning to Ishaq Dar and to prioritize a home-grown approach over foreign advice indicates a significant shift in Pakistan’s economic policy direction. The outcome of this process will play a crucial role in shaping the country’s economic future, especially in the context of ongoing challenges and the International Monetary Fund (IMF) program.
