Pakistan in great need of financing, economic policy measures.

Byline: Khalil Ahmed

Interview with Dr Ayub Mehar - a renowned economist

PAGE: Kindly tell something about yourself:

DR AYUB MEHAR: Currently, I am working with the Asian Development Bank on Infrastructure Financing in CAREC member countries. I am serving as Professor in Iqra University Karachi and also an Economic Advisor of the Employers' Federation of Pakistan (the largest representative body of the entrepreneurs and investors in Pakistan). Development Financing, Macroeconomic Policies, International Trade and Finance and Economic and Financial Modeling are areas of my research interests.

I have completed several policy research studies for international financial institutions and think tanks including 'Impacts and Financing Infrastructure Development in Pakistan: Role of CPEC and FDI', 'Infrastructure Development by Liberalizing Economic Policies: The Straight Path of Economic Prosperity', 'Financial Cooperation in South Asia: Recent Development and Challenges', 'Political Economy of Subsidies', 'Magnitude and Determinants of the Flows of Investment among South Asian Countries: Considering Economic Prosperity without Politics', 'Privatization in Pakistan: Theoretical Evidences and Policy Implication', and 'South Asia in New Economic Order: Need of Accelerated Liberalization Process'.

In recognition of my expertise, the Technology Policy and Assessment Center at Georgia Institute of Technology acknowledged its membership in the distinguished panel of international experts for Indicators of Technology-based Competitiveness, which is a project of the US National Science Foundation, United States Government.

PAGE: Could Pakistan attract whopping investment in a year or two to address its economic woes?

DR AYUB MEHAR: It is extremely important to understand that mother of all the present economic crisis in Pakistan is the sharp decline in foreign exchange reserves. This decline is the only cause of depreciation in Pakistani rupee, while growing inflation, poverty, declining domestic investment and unemployment are the ultimate consequences of the depreciation in the local currency. The decline of foreign exchange reserves pushes the government to borrow from the International Monetary Fund (IMF) and accept their conditionalities. The attention of government is diverted to the short-term borrowing from international financial institutions and friend countries. The continuous decline in exports and FDI during the last political regime is responsible for declining in foreign exchange reserves. It created a liquidity crisis in the economy.

To build the foreign exchange reserves and sustainable growth in...