Contraction expected
The government ought to take the UN’s Department of Economic and Social Affair’s warning seriously, that Pakistan’s economy is expected to fall during 2015, while South Asian economies in general are expected to grow by 5.4 percent. Try as he might, the finance minister will not be able to blame the upcoming year’s problems on politics of opposition and agitation, etc. As much as the dharnas jolted the government, they also gave them an excuse to hide behind. It was because of the protests that Chinese investment remained shy, and other foreign investment fizzled out, and the security situation worsened, and so forth. But now the prime minister has the backing of the entire political spectrum. Yet his policies inspire little confidence, both at home and at the UN.
If senior government minister notice, the report says countries like Bangladesh and Iran are on a growth trajectory because of “robust external demand” and “moderate strengthening of domestic consumption and investment”. Sadly, the external demand will do Pakistan little good, even though Nawaz Sharif promised sweeping economic reforms during the campaign. The purpose was to make the export sector more value-added, so we can have a market beyond cotton and textiles. And there’s no magic want that can stimulate domestic consumption when the economy is stagnating, unemployment is high, and there is paralysis in power, gas, water and oil sectors. The same is true for investment.
Interestingly, even now, when Pakistan stands out as fuel deficient in times of record low oil prices, the prime minister keeps making promises, the power minister refuses to take responsibility and the finance minister says a “conspiracy” is to blame. Perhaps Dar sb should explain what conspiracy kept them from honouring promises of expanding the tax net. Or what political opposition kept industry from increasing technical and mechanical goods production? Or maybe someone can explain when measures other than Saudi funds to bolster the rupee, questionable privatisation, and selective energy distribution will be adopted. If nothing else, it might just improve foreign reports about our economy. For the time, though, it seems another economic contraction is in the offing.