Tuesday July 23, 2024

No longer resilient

By Mansoor Ahmad
January 08, 2021

LAHORE: No business prospers in uncertainty. Businessmen are not sure as to when the government would be able to balance its budget or will the governance issues ever be resolved.

Businesses need clarity; the government must come out with a solid and transparent long-term growth prospective aimed at addressing the inadequacies in the system. We cannot call economic performance satisfactory if the economy is mired with trade deficit, fiscal deficit, inflation, and low or no budget for development.

Our imports are double than our exports. Fiscal deficit has gone out of hand adding to already huge government debt.

Current inflation of eight percent is unbearable, and is adding to the woes of businesses and public, who had been facing double digit inflation for two years.

This is topped by slashed public sector development programmes, as we do not have resources to finance development work and we take more loans for non-development expenses than development projects.

Our tax to GDP ratio is too low, energy shortfall is acute and we need to import gas under a plan and not on an ad-hoc basis. Pakistan’s bank mark-up is still high, which is the reason for almost no uptake of credit by the private sector. Unemployment is on constant rise too.

Massive misgovernance in the last two decades has systematically de-industrialised the country. The productivity of major agricultural crops is constantly declining.

We are not comfortable to trade with any of our neighbours. Our hope of becoming a trade corridor has been shattered.

The aspiration to relocate Chinese textile industry to Pakistan remains unfulfilled. China in the meanwhile has relocated its unviable textile industries to Vietnam, Cambodia, and some even to Bangladesh.

Governance has further deteriorated during the 30 months tenure of this regime. Active corrupts have been given free hand to fleece the consumers.

The increase in sugar, wheat, and oil rates have siphoned out over Rs1.5 trillion from the pockets of the electorate. An equivalent amount is thrown down the drain by loss-making public-sector enterprises.

Businessmen are not sure whether the interest rates would remain stable, go up or down.

They are confused whether to invest in industry, or trade in commodities or divert their resources towards the service sector or park their money in real estate.

Only the government planners have the answer to these probing questions. When would we graduate to being high-tech high value exporters, instead of being commodity or low value-added exporters?

For how long would the agriculture sector remain the mainstay of our economy? In the current water and energy scenario, we cannot even expect sustained growth in agriculture. The uncertainty is so high that no one can predict what will happen in the next

45 days. Question agitating trade and industry and honest taxpayers is that will the non-taxpaying parliament always decide how to use taxpayers’ money without even consulting them.

Since the parliamentarians do not pay according to their lavish lifestyle, they do not mind imposing any regressive tax that may burden the downtrodden or annihilate the manufacturing sector.

The bureaucracy has been empowered to dole out exemptions to the influential through SROs against the principles of free market economy. Pakistan is adding around three million new workforces every year. Has any planning been done to engage them in productive work?

There is a dire need for a broad-based dialogue between the businesses, government, opposition, and the civil society so that a viable roadmap is in place for sustained irreversible economic growth.

We cannot afford to go down in history as a generation that ruined one of the most resilient economies of the region.

We proved our resilience in all natural or manmade disasters. Our economy stood tall after the 1965 Indo-Pak war. We remained on the growth path after the massive earthquake in 2005.

We were the first economy to resume normal economic activity after Covid-19. Our planners, politicians and businesses know the potential of Pakistan’s economy.

It is a pity that we are not exploiting the actual potential of our economy because of infighting and self-interest. It is high time that instead of mortgaging our next generation our political elite should think above self-interest and empower the rich nation with poor people through transparent, unified efforts in all fields of life.

Time is running out fast as nations recognising the importance of transparency are leaping ahead at a very fast pace by introducing e-governance.

We have seen India moving ahead of Pakistan economically in the last two decades (earlier our growth was much higher than India).

Bangladesh has swept past Pakistan through sustained long-term economic policies. It would be an uphill task to catch with these economies even if we grow at their pace. Our growth potential is much higher, and to re-emerge as the star economy of the region, we will have to grow faster.