Burki, Shahid JavedHasan, Parvez2014-04-162014-04-162013-06https://hdl.handle.net/10986/17856This paper is divided into four sections. The first provides a quick overview of the current political and economic situation, focusing in particular on the stagnation of growth and deepening macroeconomic imbalances, and a fast approaching balance of payments crisis. The second section focuses on ways to improve macro-economic balances especially public finances not only by increasing revenues but restructuring expenditures including reductions in subsidies to the non-poor and increasing the effectiveness of public spending. The third section focuses on critical elements in reviving growth. The paper argues for a comprehensive growth strategy which focuses on governance as a central issue. Reversing the decline of public institutions and improving the quality of governance will provide confidence in the country's economic future and will result in increasing domestic investment. Other elements of the strategy must involve improving the energy situation; correcting the long neglect of exports and using international trade as a driver of growth (including opportunities that may become available by the intended normalization of trade with India); reversing the decline on growth rate of agriculture both by supporting diversification in the cropping pattern; processing of agricultural products, and more economical use of inputs (especially water); a new push on human development including quality of education in public schools, skills training and a new emphasis on adult literacy; and, a new compact with the private sector that phases out economic rents, reduces the burden of unnecessary or ineffective regulation not excluding labor legislation, and strengthens incentives for investment and productivity improvements especially in moving up the value added chain. Finally, the fourth section presents a summary of key actions that government could take along with a timeline for implementation.en-USCC BY 3.0 IGOAGRICULTUREARREARSAUCTIONSBALANCE OF PAYMENTBALANCE OF PAYMENTSBALANCE OF PAYMENTS CRISISBANK ACCOUNTSBANK BORROWINGBANK FINANCINGBASE YEARBONDSBUDGET DEFICITBUDGET DEFICITSCAPITAL ACCOUNTCAPITAL FLIGHTCAPITAL FORMATIONCAPITAL GAINSCAPITAL INVESTMENTSCAPITAL REQUIREMENTSCAPITAL STOCKCENTRALIZATIONCOMMERCIAL BANKSCOMPARATIVE ADVANTAGECOMPREHENSIVE DEVELOPMENTCONFIDENCE OF INVESTORSCONSUMER PRICE INDEXCONSUMER PRICE INFLATIONCONSUMPTION EXPENDITURESCREDIBILITYCRITICAL INFRASTRUCTURECURRENT ACCOUNT BALANCEDEBTDECISION MAKINGDEMOCRACYDEVELOPING COUNTRIESDEVELOPMENT BANKDEVELOPMENT POLICYDEVELOPMENT PROJECTSDEVELOPMENT STRATEGIESDEVELOPMENT STRATEGYDIRECT FOREIGN INVESTMENTDISPOSABLE INCOMEDOMESTIC INVESTORSDOMESTIC PRICEDURABLEECONOMIC EFFICIENCYECONOMIC EXPANSIONECONOMIC GROWTHECONOMIC IMBALANCESECONOMIC POLICIESECONOMIC RENTSECONOMIC SITUATIONECONOMIC STABILITYECONOMIC THOUGHTECONOMIES OF SCALEELECTRICITYEVASIONEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT COMPETITIVENESSEXPORT GROWTHEXPORT MARKETEXPORT SECTOREXPORT SECTORSEXPORTEREXPORTSEXTERNAL FINANCESFERTILITY RATEFINANCIAL CONSTRAINTFINANCIAL CONSTRAINTSFINANCIAL INSTITUTIONSFINANCIAL STABILITYFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFIXED CAPITALFIXED INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN GOVERNMENTSFOREIGN INVESTMENTFOREIGN INVESTMENT FLOWSFREE TRADEFREE TRADE AGREEMENTGDPGLOBAL TRADEGLOBALIZATIONGOVERNANCE ISSUESGOVERNMENT ACCOUNTGOVERNMENT EXPENDITURESGOVERNMENT PAPERGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SAVINGSGROSS FIXED CAPITAL FORMATIONGROWTH RATEGROWTH RATESHOUSEHOLD INCOMEHUMAN DEVELOPMENTHUMAN RESOURCEHUMAN RESOURCESINCENTIVE STRUCTUREINCOME INEQUALITIESINCOME SUPPORTINCOME TAXINCOMESINFORMATION TECHNOLOGYINFRASTRUCTURE DEVELOPMENTINSTRUMENTINTEREST PAYMENTINTEREST PAYMENTSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL DEVELOPMENTSINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL TRADEINVESTMENT ANALYSISINVESTMENT CLIMATEINVESTMENT REQUIREMENTSINVESTOR CONFIDENCEJOB CREATIONLABOR MARKETLANDOWNERSLEVIESLEVYLICENSESLIQUIDATIONLIQUIDITYLOCAL GOVERNMENTLOCAL GOVERNMENTSLONG-TERM COSTLONG-TERM LOANSLOSS OF CONFIDENCEMARKET SHAREMICROFINANCEMOBILE PHONEMONEY MARKETNATIONAL FINANCENATIONAL INCOMEOIL PRICESORGANIZATIONAL STRUCTUREOUTPUTOUTPUT RATIOOUTPUT RATIOSPENSIONPERSONAL INCOMEPOLICY RESPONSESPOWER OUTAGESPRIVATE INVESTMENTPRIVATE SAVINGSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRIVATE SECTOR INVESTMENTPRIVATIZATIONPRODUCTIVITYPRODUCTIVITY GROWTHPROVINCIAL GOVERNMENTSPUBLICPUBLIC ACCOUNTABILITYPUBLIC ASSETSPUBLIC AUCTIONSPUBLIC COMPANIESPUBLIC ENTERPRISESPUBLIC EXPENDITUREPUBLIC EXPENDITURE REVIEWSPUBLIC EXPENDITURESPUBLIC FINANCESPUBLIC INVESTMENTPUBLIC POLICIESPUBLIC POLICYPUBLIC SECTORPUBLIC SECTOR INVESTMENTSPUBLIC SERVICEPUBLIC SERVICE DELIVERYPUBLIC SPENDINGPUBLIC WATER SUPPLYPUBLIC-PRIVATE PARTNERSHIPPUBLIC-PRIVATE PARTNERSHIPSRAPID EXPANSIONRATE OF GROWTHRATE OF INVESTMENTRATES OF INFLATIONREGULATORY AGENCIESREMITTANCESREPAYMENTREPAYMENTSREPUTATIONSRETURNROADSRULE OF LAWSETTLEMENTSMALL BUSINESSESSOCIAL DEVELOPMENTSTATE ASSETSSTATE BANKSTRUCTURAL PROBLEMSTAXTAX COLLECTIONTAX COLLECTIONSTAX POLICYTAX RATETAX REVENUETAX REVENUESTAX SYSTEMTAXATIONTERRORISMTIMELY PAYMENTSTRADE BALANCETRADE DEFICITTRADE POLICYTRADINGTRANSPARENCYVALUE ADDEDWAGESWITHDRAWALWITHHOLDING TAXESWORLD TRADE10.1596/17856