Economy digs itself out of ‘War on Terror’ quagmire

Despite challenges of war on terrorism, energy crisis and global economic meltdown, the economy of the country sustained growth during the past four years as it is suggested by the major economic indicators including, foreign exchange reserves, workers remittances, inflation and industrial growth.
Four years back, when Asif Ali Zardari took the office of the President of Pakistan, the political and economic conditions of the country were at transitional phase from a dictatorial regime to a democratically elected president and parliament. Pakistan’s economy was in a shabby condition, foreign exchange reserves were fast depleting and the balance of payment position was in a difficult situation.
Under the wise leadership of President Asif Ali Zardari, PPP took tough decisions including austerity measures, steps for enhancing revenues enhance spending on social welfare and social safety nets to benefit the poor and vulnerable segment of the society.
President Asif Ali Zadari gave a new direction to present government by raising slogan of “Trade not aid” and urged the government to focus on boosting its exports and exploit local resources in this regard. Pakistan had been confronted with security challenges since 2001 after the 9/11 episode and so far Pakistan has spent over $ 80 billion on war against terrorism.
President Asif Ali Zardari in his recent address to NAM summit held in Iran said “Terrorism is a global threat. No country has suffered so much from it as Pakistan. We have lost more than 40,000 innocent lives. Our economic losses are almost 80 billion dollars”.
However, despite all these challenges the economy sustained growth during the past four years. Although the campaign against terrorism coupled with financial meltdown and spike in commodity and oil prices had led to inflation, the country still managed economy and controlled commodity prices.
Now the Consumer Prices Index (CPI) went down to single digit during the month of August.
Official sources said that the surge in food and commodity prices witnessed during 2008-09 pushed the CPI to a record level of 25.3 percent in August 2008, however during the month of August 2012, the CPI recorded just a single digit increase.
On the other hand, the Industrial sector of the country also sustained positive growth during the period despite several challenges of electricity and gas shortage coupled with law and order situation and natural calamities.
The Large Scale Manufacturing (LSM) output increased by 1.17 percent during the fiscal year 2011-12 as against the same period of last year.
Meanwhile, the remittances from the overseas Pakistanis are also increasing with each passing year and during the year 2011-12 it crossed the $13 billion mark.
Pakistan has been witnessing a growing surge in remittances since the present democratic government took over in 2008, the sources said adding that from mere $6.4 billion remittances in 2008, the fiscal year 2011-12 saw record remittances of over $13 billion.
During the month of August 2012, overseas Pakistanis remitted an amount of $ 1.204 billion in July 2012 showing an impressive growth of 9.89 percent or $108.40 million when compared with $1.096 billion received during the same month of the last fiscal year (FY-12).
Analysts are of the view that rising foreign remittances have not only brought stability to value of Pakistani rupee, but also played key role in narrowing down gap between foreign payments and receipts.
The rising remittances, second major source of foreign exchange earnings after exports, practically helped the country with record foreign exchange reserves despite high oil prices and costly imports.
The exports from the country also crossed the psychological barrier of $25 billion during the previous fiscal year (2010-11) and remained almost near to this target during the fiscal year 2011-12, showing stability in overall macro economy.