The 5Es framework

Given that elected governments in Pakistan tend to have a short-policy horizon, they are often criticised for not developing long-term policies and plans.

In sharp contrast to that, PML-N governments have always prioritised long-term planning by providing long-term policy documents such as Vision 2010 and Vision 2025. 

As the current term in government, which came with huge socio-economic and constitutional challenges ends, I am pleased to share that a long-term policy framework called the 5Es Framework has been developed. 

The framework offers a tangible pathway for economic revival in five priority areas: exports, e-Pakistan, environment and climate change, energy and infrastructure, and equity and empowerment. Through simultaneous progress on these 5Es, I strongly believe that we can put the country on a steady course toward sustainable and long-run economic progress.

To develop a broad consensus in our polarized society, we opted for a deliberative and consultative process to develop 5Es framework. In this regard, the Ministry of Planning, Development, and Special Initiatives organised the Pakistan Turnaround Conference in June 2022 under the chairmanship of Prime Minister Shehbaz Sharif. 

This conference provided us with broad contours to develop a framework for economic recovery.

The Planning Commission chalked out the concrete 5Es Framework on the basis of deliberations at the conference and additional input from the relevant ministries, departments, and academia. 

The framework comprises multi-pronged strategies and a variety of initiatives to put Pakistan on a sustained growth trajectory in the short to medium term. Most of these strategies and initiatives are already in the implementation phase, and have been included in the Public Sector Development Program 2023-24.

To state the obvious, the PTI regime had left Pakistan with an unprecedented economic crisis, including large current account and fiscal deficits, double-digit inflation, massive depreciation of the domestic currency, and dwindling foreign exchange reserves. 

Economic revival has been the government’s topmost priority since assuming office in April last year. Through extensive consultations with an array of stakeholders, the root causes of the persisting economic crisis were identified. Chief among them was the structural problem of boom-bust cycles, where every boom was followed by a balance of payments challenge. 

Consumption-led high-growth episodes were financed by borrowed resources. Consequently, the economy continued to face twin deficits, causing staggered growth.

Exports are the first E of this framework due to its critical value. All successful economies in the Global South – for example, China, Vietnam, and South Korea – have opted for an export-led growth model. Pakistan has historically relied on import-based consumption, which has led to imbalances in its payments. 

Now we have to shift towards this export-led growth model to tackle the chronic boom-and-bust cycles by addressing foreign currency liquidity challenges, and keep the economy competitive by laying emphasis on productivity enhancement, product and market diversification, brand development, trade facilitation, and linking production networks with global value chains.

The outgoing government launched several initiatives to boost exports, including the National Productivity Master Plan in collaboration with APO and KDI to enhance productivity, trade agreements with Central Asian and Gulf states, and establishment of a border market with Iran to improve intra-regional trade, rationalisation of tariff, the launch of the Export Readiness Program, the promulgation of GI Law for Trade Mark registration, e-Tijarat and E-Commerce Export Framework to boost the exports of Information and Communication Technology products, and the Board of Investment’s Pakistan Regulatory Reform Initiative to improve the ease of doing business in Pakistan.

The second E is e-Pakistan, which recognises the transformative power of information and communication technology and hence aims to build a digital economy and enhance digital infrastructure in Pakistan. 

Currently, ICT exports are estimated to exceed $2.5 billion, significantly low as compared to regional competitors. The current workforce employed in the IT sector is around 625,000 including freelancers. Universities produce 25,000 graduates approximately every year. 

The global market size of robotics and artificial intelligence alone is projected to exceed $563 billion by 2030.

To create a holistic digital ecosystem with infrastructure and institutional frameworks for rapid delivery of innovative digital services, the government has taken several steps like formulation of the E-Commerce Policy, establishment of the National Information Technology Board, National Incubation Centres, National Centre of Robotic and Automation, National Centre for Cyber Security, Centre for Excellence in AI. 

These measures will boost the IT sector, improve service delivery, and drive economic prosperity.

The third E – environment and climate change – highlights the importance of addressing environmental challenges and climate change. Pakistan faces significant challenges in ensuring the sustainability of its environment, water resources, and food security. In recent years, the impact of climate change has worsened these challenges. 

The devastating floods of last year clearly manifested why Pakistan was ranked as the eighth most vulnerable on the Climate Risk Index of 2021. Due to a rising population and lack of water resource governance, Pakistan will soon face a water security crisis. Moreover, the frequency of droughts has increased over the past decade, posing immediate food security risks.

The outgoing government adopted several measures to mitigate the effects of climate change. 

Salient among them are the Clean Green Pakistan Initiative, National Clean Air Policy 2023, the 4RF Strategy, the Sindh Coastal Resilience Project, Green Infrastructure for Resilient Cities, Rural Development and Climate Resilience in Gilgit-Baltistan, Resilience Enhancement, and Livelihood Diversification in Balochistan. 

Food and water security projects included: vertical farming, regenerative farming, productivity enhancement of rice, sugarcane and wheat, the Naulong Dam Project, the Sindh Water and Agriculture Transformation Project, and wastewater treatment through bioremediation.

The fourth E is energy. Energy shortages have long plagued Pakistan’s socio-economic stability. From 2013 to 2018, Pakistan undertook an ambitious initiative under the China-Pakistan Economic Corridor to meet these shortfalls, adding 12,230MW to the energy mix. 

In addition to electricity generation projects, the flagship 660 KV HVDC Transmission Line Project from Matiari to Lahore for the generation of 4,000MW capacity has enhanced the grid infrastructure. The government has made significant investments in electricity generation, including coal, hydro, and renewable sources. Initiatives such as green building codes and climate-resilient infrastructure will ensure affordable and sustainable energy solutions.

The government is also making concerted efforts to diversify its energy mix by investing in renewable energy sources like wind, solar, and hydro power. 

In this regard, the Alternative and Renewable Energy Policy provides a supportive environment for renewable power projects, and increases the share of green energy capacity to 20% by 2025 and 30% by 2030 through attracting private capital in the area of green energy. Consequently, this nudge has shown positive results.

Likewise, Thar’s indigenous sources of coal, already contributing 1,320MW to the national grid, will be utilised in an efficient and environmentally responsible manner. 

Energy efficiency and conservation is another priority, which can help Pakistan to save up to 10-15% of its primary energy supply. The government has launched the National Energy Efficiency and Conservation Policy 2023 to realize this goal.

The 5th E is equity and empowerment. This leg of the framework acknowledges the paramount importance of equity in fostering inclusive economic growth and, consequently, recommends a strategic blend of universal policies, affirmative actions, and targeted interventions. Several interventions seek to enhance population planning while ensuring accessible and high-quality health, education, and social protection services for all citizens. 

Health-sector reforms aim at universal health coverage, national programmes for eradicating hepatitis, diabetes, and polio, constructing police hospitals and public hospitals for cancer treatment, implementing nutrition programmes, delivering family planning services, and broadening immunisation coverage.

Key interventions in the education sector include the establishment of a national fund to address the crisis of out-of-school children, attaining universal enrollment in Islamabad, introducing virtual schooling and distance learning programmes, reforming curriculum and assessment systems, developing the US-Pakistan Knowledge Corridor, providing scholarships for the top 25 globally ranked universities, granting 5,000 higher education scholarships to students from Balochistan and former Fata regions, and expanding university campuses in under-developed areas.

Prominent initiatives targeting youth, women, and differently-abled individuals encompass skills development programmes, 60,000 internships under the Ba-Ikhtiyar Naujawan Internship Program, 100,000 laptops under the PM Laptop Scheme, an innovation fund, interest-free business and agricultural credit, constructing sports complexes, implementing a mobility support scheme for women, and establishing special education and technical training centres for differently-abled persons. 

Furthermore, a special development scheme for the socio-economic uplift of 20 of the poorest districts is being implemented to promote regional equity.

In short, the 5Es Framework provides a comprehensive approach to turn Pakistan’s economy around. Pakistan has the potential to overcome its economic challenges and emerge as a vibrant and prosperous nation on the global stage. 

By focusing on export-led growth, digital transformation, environmental sustainability, energy diversification, and inclusive growth, the country can achieve sustainable economic development.

Implementing the 5Es requires a strong commitment from all key stakeholders. We need to go beyond divisive, polarised, and hate-based politics and must remain committed to implementing the necessary structural reforms that will guide Pakistan onto a sustainable path of economic prosperity.

The writer is the outgoing minister for planning, development and special initiatives. He tweets @betterpakistan and can be reached at: [email protected]