Macroeconomic Management in a Decentralised Set-up (PANEL DISCUSSION-III)

I am thankful to PIDE for giving me the opportunity to be hereand participate in this important discussion. It is always exciting tocome back to this audience because this is where I started my career asan economist. We have with us Dr S. M. Naseem and Dr Nawab Haider Naqviwho guided me in my earlier years and I would like to thank them also. Iwill try to restore some balance after Dr Ashfaque’s alarming commentson the state of the economy, recognising well that we have challengesthat need to be addressed. Mr Baldridgde in his discussion has given usfifty questions that capture many of the challenges. But first let mesay a few words about whether politics should triumph over economics orthe other way around. Lets not forget that we have a democraticallyelected government that represents a delicate coalition of severalpolitical parties and competing political interests. In this setting, itis not at all surprising that technocratic economic solutions aresecondary to the political ones, and that “economics does not triumphover politics” as lamented by the previous panelist. In a democraticframework, the economists’ role is to ensure that political objectivesare met without inflicting an unsustainable fiscal burden andsacrificing the long term development objectives.