Special Cell / Think Tank - COVID-19 Pandemic
 
26 May, 2020

Special meeting of the PM-formed Think Tank was held during the Eid holidays with Adviser to the Prime Minister on Finance & Revenue

A special meeting of the PM-formed Think Tank was held here during the Eid holidays with Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh in the chair.

All other members of the high-level group also participated in the meeting while Governor State Bank of Pakistan joined the proceedings on special invitation

During the meeting, the work done by Finance & Banking Committee remained under primary focus apart from the feedback from Committee on Social Safety Nets. Sultan Ali Allana presented the joint work of committee on Banks and Financial Institutions to improve liquidity and credit for individuals and businesses. The emphasis remained on Digital Account Offering for overseas Pakistanis, with reference to its objectives, key processes, product features as well as key regulatory and administrative challenges.

Mr. Shoukat Tarin and Mr. Sultan Ali Allana jointly shared other proposals too, including suggestions on enhancement of temporary relief facilities, expanding lending to SMEs and enabling demand growth through expanding consumer lending and encouraging housing finance.

Advisor Commerce and Dr. Ishrat Husain sensitized about the need for due diligence with reference to potentially adverse effects of the new scheme on existing remittances/ products, FATF concerns and harmonization of all initiatives aimed at promotion of digital economy. The experience of Pakistan Banao Certificate needs to be kept as benchmark to plug potential loopholes while offering new product.
Advisor Finance stressed on the need for demand trials in pursuit of developing target market. The proposal by Arif Habib for reduction of NADRA fees in data verification process got particular endorsement from other members ,as this wholly public-owned entity should not keep profit as primary motive in its operations.

Governor, SBP appreciated various recommendations of the Committee on improving liquidity for individuals and businesses and shared that SBP, in collaboration with MOF and CDNS has been in final phase of launching a saving product for overseas Pakistanis, in partnership with banks and CDNS, where lot of back-end work has already been sorted out.

Dr. Ishrat Husain and other participants raised concerns about the level of automation and digitization within CDNS and stressed for the need of combining of SBP’s and Committee’s proposals to offer more robust and legally compliant solution.

Shoukat Tarin briefed that multiple consultative sessions of Committee have been held with Naya Pakistan Housing Authority and other stakeholders, on shaping recommendations for boosting investments in housing sector and promotion of multiple financing options . It was further informed that committee report was ready for sharing with the group members to attract constructive feedback.

Dr.Ijaz Nabi shared the committee’s assessment on Ehsas program, with reference to key areas of concerns and briefed the participants about various recommendations shaped so far. Participants felt the need for engaging Dr. Sani Nishtar in the next meeting to have better understanding on moving forward. Provincial coordination issues were also highlighted which need to be resolved for smooth implementation of matters like tax harmonization.

Advisor to PM on Finance & Revenue shared holistic capture of all the main arguments presented in the meeting. He advised Finance Secretary to organize meeting of SBP with Shoukat Tarin, Sultan Ali Allana and Arif Habib , to have understanding of bilateral point of view on the features, processes and allied aspects of Digital Account Scheme, with a view to evolve consensus on unified practical approach. Moreover, other proposals of Committee also need to be deliberated with SBP in the same meeting to have clarity about way forward.

It was decided that members of Think Tank Group would share feedback on proposals of various committees to synthesize unified approach. Committee on Housing initiatives was requested to share its report for advance feedback whereas Chairman, Naya Pakistan Housing Authority and Dr. Sania would also be invited in next session to evolve consensus on respective domains.

It was unanimously agreed that Think Tank forum would meet again shortly owing to the urgency for finalization of work. Advisor Finance shared that recommendations of Think Tank would also be presented before PM soon, so that final directions from top forum are incorporated into budgetary process including budget speech.

 
03 May, 2020

Adviser to PM on Finance and Revenue chaired 3rd meeting of the Think Tank

Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired 3rd meeting of the Thinktank, here Sunday to assess the emerging situation resulting from Covid-19 related economic slowdown and its impact on individuals and businesses.

The forum has the  mandate to provide cognitive support to on-going response of the Federal Government  apart from extending help  in designing new initiatives and mid -course correction of  interventions already under execution. The forum has representation form eminent public finance practitioners, financial analysts, bankers, development and monetary economists and academia. The participants included Advisor to PM on Commerce, Finance Secretary, Dr. Ishrat Husain, Shaukat Tareen, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib and Dr. Waqar Masood.

Advisor to PM on Finance engaged all participants in extensive deliberations, while defining that the focus of the forum would remain on the short term urgently needed measures to give boost to economy which is under acute stress due to both demand and supply compression. He emphasized the need to learn from international experience in designing fiscal, monetary and other policy responses by the Federal as well as Provincial Governments.

The Thinktank has devised an “Impact and Urgency Response Matrix” by identifying multiple actionable themes with low, medium and high economic impacts, pitched against short, medium and long time horizons. The participants discussed the evolving economic scenario and identified priority areas which carry the potential of giving maximum boost to economy through accelerating aggregate demand and easing out supply concerns while also ensuring stability of financial system which is equally critical in robust recovery of the economy.

Advisor to PM, Dr Abdul Hafeez Shaikh emphasized the need for evolving road map for chosen domains, thereby bringing clarity about what needs to be done and who will do it. The need for real-time data and research was highlighted in development of clear roadmap and implementation framework. The forum selected six broad priority domains including boosting social safety nets (Ehsas and allied initiatives), food security and safety of supply chains, boosting role of banks and financial institutions in appropriately designing incentives for market participants, kick-starting low and medium cost housing projects, making PSDP and Provincial ADPs responsive to labour intensive propositions and business facilitation through fiscal interventions.

The forum decided that fiscal proposals including changes in rates of Sales Tax, refunds etc. would be deliberated with FBR in detail, so that next Federal Budget addresses these burning concerns which are essential to spur consumer spending. Moreover, proposals related for financial and banking matters including review of payroll refinancing scheme, incentives to banks to finance MFIs and MFB, measures for enhancement of remittances and injecting additional liquidity to commercial banks by cutting CRR/SLR and CCB, were decided to be dealt by forum in more details.

Advisor to PM on Finance concluded the session with the consensus decision that detailed roadmaps for chosen six domains would be prepared so that respective Ministries are engaged, to create further value in on-going plans meant for giving economic boost. It was further decided that implementation review of PM Economic Stimulus Package (worth Rs. 1240 Billion ) would be a regular feature in next Thinktank meetings to ensure value for money apart from smooth service delivery to deserving segments of society.

 
25 April, 2020

PM-formed Think Tank identifies key areas to boost economy during Covid crisis

Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank, recently constituted under the directions of Prime Minister, to deliberate on the Covid related economic downturn and mitigation of ensuing risks.

The forum has been mandated to provide platform for collective thinking on the emerging situation resulting from the Covid-19 related medical crisis and its spillover to economy. Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib, Dr. Waqar Masood. Advisor to PM on Commerce and Finance Secretary are also part of it.

After extensive deliberations on emerging themes, the forum  identified key areas for policy interventions, including monetary affairs and banking sector, fiscal matters and public finances, social safety nets, SMEs and large businesses, commodity prices, public health challenges and role of private sector and NGOs. Advisor to PM on Finance apprised the forum about developments at G-20 forum regarding debt relief package. There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.

Participants highlighted the need for further downward revision in policy rate coupled with passing on the benefits of slashed oil prices in global market to public. The focus of the deliberations remained on strengthening of aggregate demand and supply of the economy, with emphasis on lower income groups and small firms.  Need for further liquidity for banks was discussed as strong and vibrant banking sector is essential to boost economy under such strong recessionary headwinds.

Ways to further encourage remittances, agriculture financing and timely lifting of crops and vegetables from small farmers were analyzed.  The forum discussed the need and scope for bailout package for large businesses and exporters apart from gauging the viability of reduction of GST on consumer goods, from 17% to 5%, to kick-start consumer spending for next 2 years. The constraints of FBR amid high revenue targets in a shrinking economy were highlighted by Finance Secretary. Decision in this regard would be made after detailed consultations.

The progress of ongoing cash disbursements under Ehsas program were shared. The need for gathering reliable data on recently laid-off works and timely cash transfers to the most vulnerable were emphasized.  Economists within the Thinktank stressed for the need of designing PSDP to facilitate labor intensive projects apart form crafting robust agriculture financing plans. The need for public private partnerships was elaborated to create fiscal space within public sector through these off-balance sheet financing arrangements which encourage private sector participation in public sector initiatives.

Professionals within group stressed for the need of oil price hedging, power sector debt securitization and creation of fiscal space through rescheduling of foreign and domestic debts. The need for designing lending programs for housing sector participants came under consideration including facilitation of end-users. The massive scope for mortgage backed financing in Pakistan was also highlighted.

Advisor to PM on Finance and Revenue took lead in picking most urgent themes for proper policy deliberations and decisions. He shared that Prime Minster of Pakistan may participate in the next session to give boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for economy in pragmatic fashion.

Advisor decided that interventions with highest, medium and low impacts would be sorted out and aligned on the basis of short, medium and long term time horizons so that most essential tasks are pushed on priority basis, with proper funding and execution arrangements.   

It was also decided that international think-tanks will be engaged for cross-leaning for select policy making players in Pakistan so that robust interventions are designed to bring relief to economy and most deserving segments of public. 

 
 
 

 

 
 
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