Page 14 - CMA Journal (Sep-Oct 2025)

EXCLUSIVE INTERVIEW

E x c lus iv e I nt er v iew

“ ICMA: If you look across Pakistan’s industrial
landscape, which sectors do you feel are just waiting
The toughest roadblocks keeping
for the right push to become real game-changers?
Dr. Ishrat Husain: I am of the rm view that no
our industries from becoming
can have the foresight and perfect knowledge as to
globally competitive are over-taxation economist, planner, bureaucrat, or international agency
which sectors would emerge as winners or game
of manufacturing, overregulation by changers. We should provide a level playing eld and let
the businesses themselves choose the sectors or sub
the state, anti-export bias in tariff sectors in which they can earn decent returns. This would
reveal the comparative advantage that Pakistan has
setting, and the excessive burden of vis-a-vis other competing countries.

an inefficient energy sector Unless we drastically revise our rules of business and Past policies have failed because rent seeking activities
have ourished with the support of the government.
processes, revamp the whole value chain of human The role of the government should be that of an enabler
resource management, introduce e-Government, and and facilitator, investing in human capital and skill
bring in domain experts and specialists in the formation, infrastructure, research and development, etc.,
“
Dr. Ishrat Husain government, business as usual would prevail. rather than a protector of some industries or another.
ICMA: From your years as Governor of the State Bank,
ICMA: In your experience, what is the best way for
Former Advisor to the Prime Minister on what lessons on reform and policy still ring true for government and business leaders to work together
Institutional Reforms & Austerity and reviving industry today? so reforms don’t just stay on paper but actually get
delivered?
Former Governor, State Bank of Pakistan (SBP) Dr. Ishrat Husain: SBP has built a solid reputation upon Dr. Ishrat Husain: Successful developing countries have
three pillars: (a) quality human resources recruited on
pure merit through open competition, groomed and followed a model where the state, private sector, and
upskilled continuously, evaluated on the basis of civil society organizations work together in a
ICMA: When you look at Pakistan’s economy today, Recapturing this lost market share and becoming more performance, and paid market-based remuneration; (b) collaborative and cooperative manner. On the contrary,
we are constantly engaged in an adversarial blame
what do you see as the toughest roadblocks keeping competitive is the challenge. continuous technology upgradation and digitalization, game, the private sector blaming the government and
our industries from moving forward? eliminating redundant processes and simplifying
ICMA: You have worked closely on institutional procedures; and (c) strong and e ective supervision of vice versa, while civil society blames both. Unless we
Dr. Ishrat Husain: The toughest roadblocks keeping our reforms. In your view, how can our bureaucracy and the banking sector driven by internationally recognized change this mindset, the possibility of sustained growth
industries from becoming globally competitive are public institutions cut through red tape and truly act nancial soundness criteria. is likely to remain evasive. Competitive markets produce
over-taxation of manufacturing, overregulation by the as partners and facilitators? System-wide measures to strengthen the quality of and allocate goods and services e ciently, while the
state distributes the bene ts of growth equitably. Civil
state, anti-export bias in tari setting, and the excessive Dr. Ishrat Husain: Our institutions of economic governance human resources and the documentation of the society complements both.
burden of an ine cient energy sector. This set of have become acculturated to upholding the status quo economy and payment system through digitalization
constraints tilts the balance in favour of producing for the and operating in their comfort zone. Those who are would have a bene cial e ect. ICMA: And nally, if you had to pick just one or two
large domestic market rather than working strenuously leading these institutions do not want to take risks and bold reforms to kick-start Pakistan’s industry, which
to penetrate international markets. Cumulative in ation introduce change, as these measures would hurt ICMA: How damaging is policy inconsistency for ones would top your list?
over the last three years has eroded the purchasing entrenched interests, who, in turn, would do their best to businesses and investors, and what can be done to Dr. Ishrat Husain: Fiscal consolidation in the form of
bring more continuity?
power of the middle class and has hence reduced dislodge the leaders from their positions. mobilizing resources from individuals, rms, and sub
sectors which are not paying or are evading taxes,
demand for domestic manufactures. Dr. Ishrat Husain: Lack of sound policy continuity and
predictability, combined with inconsistency and non- targeting subsidies on food, energy, agricultural inputs,
ICMA: Do you think our current tari and trade Lack of sound policy continuity transparency, has acted as a disincentive for both health care, and girls’ education for poor households,
policies are helping or hurting industry, and how domestic and foreign investors to expand their existing and curtailing the size and outreach of the federal and
would you reshape them to make us more and predictability, combined capacity or take up new ventures. This has resulted in a provincial governments while resourcing and devolving
competitive? with inconsistency and low investment rate and consequently a low growth rate. service delivery to elected local governments is at the
top of my list. Fiscal and external account imbalances
Dr. Ishrat Husain: As I mentioned earlier, the current Our investment to GDP ratio has remained stagnant at originate due to scal imprudence, and the private
around 15 percent for the last 25 years, while India and
policies are hurting industry, particularly export non-transparency, has acted as Bangladesh have increased theirs to 30 percent. You can sector is crowded out of the bank credit market as the
industries. Tari s act as a tax on exports, especially for a disincentive for both domestic see the di erence in the respective growth rates, 3 public sector dominates. The other reform I would pick is
those participating in global value chains. Had percent for Pakistan and 6 to 7 percent for both India and civil service reform and aligning it with modern
Pakistan maintained its share of exports to GDP of 16 and foreign investors to expand Bangladesh. Security concerns have also kept foreigners structures, practices, and processes.
percent attained in 1999, we would have export their existing capacity or take up away from Pakistan. Enlightened political leadership, The Editorial Board thanks Dr. Ishrat Husain, Former Advisor to
earnings of USD 56 billion by 2022, 75 percent higher rather than narrow self-interests, can bring about the Prime Minister on Institutional Reforms & Austerity and
Former Governor, State Bank of Pakistan (SBP) for sparing his
than the USD 32 billion actually realized, with no need new ventures continuity, consistency, and predictability and put the precious time to give an exclusive interview for Chartered

for external borrowing while allowing more imports. country on the right track. Management Accountant Journal.
12 ICMA’s Chartered Management Accountant, Sep-Oct 2025