Policymaking: the wrong choices

Economic policy is about choices and the right policy choices make the difference. Pakistan, unfortunately, for the last four decades has been making the wrong ones. No wonder, we are in a 24th IMF programme, unable to get ourselves out of this vicious cycle of slow growth, higher taxes, unsustainable budget deficits, excessive debt burden and a never-ending balance of payments crisis. Our myopic politicians and bureaucrats repeatedly succumb to short-term "whack-a-mole" solutions to the economic ills. Unless and until we embark on a comprehensive supply-side economic agenda of accelerated growth, we are unlikely to get out of this quagmire. Trying to do the same things over and over again and expecting a different outcome is insanity (Einstein's dictum). What Pakistan needs is a straightforward set of supply-side economic policies: rationalisation of its tax system A-Z free trade, sound money, fiscal restraint, deregulation, privatisation and lastly, debt restructuring.