Pakistan has been beleaguered by terrorism and security “challenges” but is still managing to focus on growth and job-creation.
“Pakistan’s economy has shown great resilience against the global trend of developing countries and the emerging markets which have seen negative declines,” Finance Minister Ishaq Dar said while speaking on the sidelines of the annual meeting of the Asia Development Bank in Frankfurt.
“We have shown seven-year high growth in the last fiscal year and in the current year we hope to cross 5 per cent. We are aiming at a growth rate of 7 per cent in the next two fiscal years so things are moving quite nicely,” the minister said.
“But we had two serious challenges apart from macro-economic stability which is now in order. One was security and extremism and Pakistan took a bold decision in June 2014 to have an all-out war against terrorism and it’s a fairly costly item,” he said.
Pakistan has been a hot-bed of terrorist activity despite attempts to combat insurgents in predominantly the north-western region of the country that are linked to the Taliban, al Qaeda and so-called Islamic State. Despite the government being an ally of western countries’ alliance against terrorism, the conservative Muslim country has also been accused of having an ambivalent stance towards religious extremism and, at worst, of sponsoring and harboring terrorists.
Pakistan’s government strongly snub such accusations, pointing to the arrests of high-ranking terrorist suspects since 9/11 attacks and claiming that it assisted the US in its pursuit of Osama bin Laden, the founder and head of al Qaeda, who was killed in Pakistan in 2011.
Dar had previously said that the country sustained US$4.53 billion direct and indirect losses from terrorism in the fiscal year 2014-15 and that his country faced enormous challenges after the 2013 general election which was won by Nawaz Sharif and his Pakistan Muslim League-Nawaz party.
“The security challenges that Pakistan was facing at the time of the last general election in 2013 were what I call the three major ‘E’s’: extremism, economy and energy,” he said.
“We took all the three E’s on and we’ve had great successes so far in the macro-economic stability and we are now working on the growth trajectory, job creation and things are moving on fine and security is equally important and so is the energy.”
The International Monetary Fund (IMF) gave Pakistan a US$6.6 billion loan in 2013 under a three-year programme designed to help stabilise the economy. It has, as of March this year, received around US$5.5 billion of that aid. Pakistan’s gross domestic product (GDP) is expected to have grown 4.5 per cent this fiscal year, the IMF noted.
In March 2016 following a review of Pakistan’s economic performance in the light of the aid programme, the IMF concluded that the country was reaching fiscal targets and that economic activity had “continued to gradually gain strength,” Mitsuhiro Furusawa, the Fund’s Deputy Managing Director, said in the report.
Furusawa added, however, that “building on these gains, further progress, including in the area of structural reforms, was needed to generate strong and inclusive growth and make the economy more resilient and competitive.”
There are some commentators that think that terrorism is still a major risk for the country on both an economic and political level. Dar said that a gloomy outlook on Pakistan was unfair as developing countries faced the same risks. “The terrorism risks are also in western countries and it’s a global war. We have to fight it together. Pakistan has played a very proactive role at a huge cost to its exchequer,” he further commented.