- Tough steps need to be taken
By Jawad Kamal
There is no denying the impression that economy plays a consequential role in the progress of any country. It is a well-established fact that a stable economy can easily save any nation from a plethora of quandaries like illiteracy, poverty and backwardness. China and the USA are the shining examples of strong and stable economies. An economically strong state is able to write its own future and to decide its fate to stand tall among the comity of nations. Unfortunately, in the case of Pakistan economic indicators are depicting a very bleak picture and clouds of distress are hovering over it, hence, Pakistan is unable to take off. Since, Imran Khan has entered office, he has been facing some serious backlash regarding unwieldy economic growth. Or rather its absence.
Recent figures of the Economic Survey 2018-19 show a gloomy condition of Pakistan’s economy that needs some serious attention and contemplation by policy makers. It is an irony of our time that poor economic growth has wreaked havoc in the social fabric. If we dig deep it can easily be palpable that on the one hand External Debt and Liabilities stands at $105.8 billion and on the other hand Pakistan Rupee has depreciated around 44 per cent since December 2017. As a result, Pakistan’s economy is on the ventilator. Similarly, the fiscal deficit stands at five per cent of GDP. No doubt overall trade deficit reduced by almost $5 billion but exports registered a decline of 0.1 per cent. It is highly surprising and lamentable too that the GDP growth for the current fiscal year has been estimated at 3.3 per cent against the target of 6.2 per cent. Most importantly, according to the Consumer Price Index, inflation hovered between seven to eight per cent in fiscal year 2019, by virtue of high utility prices, rising input costs and the falling rupee.
It is evident beyond any shred of doubt that Pakistan’s economy is under the clouds and facing some serious conundrums, but it is the need of the hour and there lies a great responsibility on the shoulders of the incumbent government to bring Pakistan’s economy from the troubled waters to the safe shores by taking rational and pragmatic measures.
It would not be unfair to say that Pakistan’s economy is embroiled in the fold of some serious problems, due to which country is unable to take off and compelled the masses in the pit of obscurity. In the meantime, it is evident beyond the realm of doubt that some hard steps can easily beef up Pakistan’s reserves
Firstly, an investment-friendly environment is the prerequisite for business-related activities. According to the Ease of Doing Business report, Pakistan is ranked 136th out of 190 economies. So, Pakistan has to ease custom laws and regulations, improve the security of the country, ease its visa policies and rebrand its international image as a desirable destination for Foreign Direct Investment (FDI).
Secondly, Pakistan must give attention to its domestic industry i.e., to expand its export portfolio, while the establishment of special economic zones and free trade zones at Gwadar will enhance export growth and access to regional markets. The trade diplomacy also needs to be strengthened.
Thirdly, government ought to broaden its tax base because 90 per cent of its revenue comes from indirect sources.
Fourthly, uproot corruption because this menace has permeated every nook and corner of the country, and consequently disturbed the smooth sailing of the economy.
Fifthly, the major portion of Pakistan’s economy is undocumented so it is a need to bring that portion into the government files.
Sixthly, $9 billion has been transferred outside Pakistan through illegal means like hundi and hawala. The government has to deal this issue with an iron hand if it wishes to keep the economy afloat.
Lastly, Pakistan must try to establish harmonious relations with neighbours as the trade between Pakistan and India is only $2 billion but it could be as high as $37 billion, according to a World Bank report.
It would not be unfair to say that Pakistan’s economy is embroiled in the fold of some serious problems, due to which country is unable to take off and compelled the masses in the pit of obscurity. In the meantime, it is evident beyond the realm of doubt that some hard steps can easily beef up Pakistan’s reserves.
The writer is a freelance columnist.