During an exclusive interview with Business Recorder followed by an interaction with media persons, Rachel Glennerster said that in terms of going to IMF, it is important that the government has its own long-term strategy for improving the economy, addressing payment issues and getting growth to higher level, particularly taking economy to a position that it does not trigger balance of payment problem.
She said if the government can set out reforms agenda that the country needs and IMF may want to support it, then sequencing should be prioritised by the government itself as to what it wants to do. She said that Pakistan must come out with areas of strategic interest and areas of reforms with implementable specifics in the next step. She added that it is also important to think about sequencing and prioritisation by the government itself.
"The government must have its own plan for reforms and then it should go to the IMF; rather the country faces macroeconomic stability and then the IMF forces reforms agenda," she said.
Replying to questions, she said Pakistan has a lot of potential and there have been ups and downs but at longer term trajectory, there has been some progress in recent years.
Rachel Glennerster said, "If you compare Pakistan with some of the regional competitors, there are areas where Pakistan has not been improving as fast as others." She said other countries had considerable improvement on human capital and transformation in the economy in the aspect of the industry and these are challenges Pakistan needs to think about and how to upgrade its trajectory.
She said in her view there is good recognition in the government about the challenges but with a long list of reforms. The major challenge for the government is to figure out where to focus as well as to make sure that reforms are sufficiently implemented.
She said there is an economic team within the DFID working on trade for making sure to improve the trade relations. She said that there is no challenge to GSP Plus due to Brexit as commitments were made to make sure that these are maintained. She said that DFID development cooperation is strong and continuing.
About the China-Pakistan Economic Corridor (CPEC), she said that CPEC is an interesting opportunity to invest, especially in energy and infrastructure sectors which are important for the country.
"One of the objectives of CPEC is to improve trade, and it is very important for Pakistan to increase its integration with the world economies, that is where most economies get their big increase in economic growth. So the CPEC through energy and infrastructure can help with that," she added.
Rachel Glennerster further said that according to her view, investment is complimentary providing support towards what is going on and that is common sense. For investment they want to take into account other things going on and not to duplicate efforts of others, so investment is an important complementary approach, she added.
The most important thing is to improve business environment and investment climate both for domestic investors and foreigners and improve competitiveness - improving competitiveness is about being open - about having predictable regulations and about appropriate pricing, she added.
Replying to a question, the DFID official said that one of the big challenges for Pakistan is to deal with the trade barriers so that the people can come and make investment.
"My advice to the government is to keep prices right and reduce barriers to investment and improve competitiveness, which is not just I am not talking about exchange rates particularly, when I talk about competitiveness, it means competition with other economies as a driver for innovation as competitiveness can help the country improve its exports," said Rachel Glennerster.
The DFID official said when they talk about support to investment that is one should not just think about direct support. The right thing is getting the climate right, human capital is also important for investment as if one have well trained working capital that is also very important for investment.
She said that the UK is one of the biggest development donors to Pakistan. Based on the most recent published data, the UK spends more money on development aid in Pakistan than anyone else, and it is more than double that the rest of the EU member states put together.
The need for development spending in Pakistan is high, as approximately 66 million Pakistanis live in poverty and 22 million children are out of school. One in 11 children die before their fifth birthday and 8,000 women die in childbirth every year. Millions of Pakistani people are benefiting from the UK's support every day. Between 2015 and 2021, two million Pakistani children will gain a decent education, 3.3 million Pakistanis will get sustainable access to clean water and/or sanitation, approximately 6 million people will benefit from nutrition programme and over 1.8 million Pakistanis will have accessed UK-backed microfinance loans to increase their economic opportunities. One of the challenges this country has burgeoning population growth. Replying to another question, the DFID official said tax is a complicated area and there is always room to improve. Tax collection is always a difficult issue and the government has to take tough decisions.