Focus on managing crises in emerging markets.

Byline: Shabbir Kazmi

The State Bank of Pakistan (SBP) hosted a seminar on "Managing Crises in Emerging Markets" in collaboration with the Pakistan Business Council (PBC) in Karachi. The seminar was attended by policy makers, financial sector specialists, researchers, government officials, heads of commercial banks, eminent business persons, academics and the media persons.

In his welcoming remarks, Governor SBP, Dr. Reza Baqir stated that the objective of holding the seminar was two-fold. First, to demonstrate that, in addition to its mandate of formulating monetary, exchange rate and financial stability policies, SBP endeavors to facilitate constructive debate on economic issues and is open to diverse points of view. Second, to highlight that Pakistan is not unique and there are many other emerging economies that have also faced economic crises and undergone difficult adjustments.

Athanasios Arvanitis, Deputy Director of the International Monetary Fund (IMF), delivered the keynote speech. His speech was followed by a panel discussion in which Ehsan Malik, CEO Pakistan Business Council, Sakib Sherani, CEO of Macro Economic Insights and Khurram Husain, a renowned journalist participated.

In his address, Arvanitis highlighted some of the main similarities of crises across emerging markets, notably the role typically played by elevated levels of debt, high public and external deficits, inflexible exchange rates, lack of competitiveness, low saving and investment, and maturity and currency mismatches. Despite these similarities, he emphasized that there was no one size fits all model for managing crises. Instead, the IMF focuses on different dimensions while assisting a country in developing a homegrown stabilization program. The approach emphasizes the need to diagnose the roots of a country's crisis, trends and developments in the balance sheets of various economic agents and their interconnectedness and country specific dynamics that affect the political economy of reforms.

In terms of designing stabilization programs, he stressed the importance of country ownership and measures to provide support for vulnerable segments of the population. He also drew parallels for Pakistan from the experiences of managing crises in other emerging countries.

Referring to the IMF program with Pakistan, Arvanitis remarked that it is important for the government to focus on meeting the Sustainable Development Goals (SDGs) under the UN's 2030 Agenda. He noted...