Pakistan’s economic future

665

Malik Ashraf

The economy of Pakistan has not only been revived but the country has been put on the road to a sustained development. This reality has also been acknowledged by a number of international rating agencies like Moody’s, MCI and global lending institutions including IMF, World Bank and ADB besides internationally renowned media like The Economist and Wall Street Journal have also from time to time been acknowledging the turnaround in the Pakistan economy, triggered by sound management of the economy by the PML (N) government
Management of an economy, particularly a developing country like Pakistan is undoubtedly an arduous task due to international linkages, developments on the global level as well as internal economic, social and political situation. Needless to emphasize that when the PML (N) government was installed in 2013, the economy was in shambles with the GDP growth rate hovering around 3%. Fiscal deficit stood at 8.8% and inflation was in double digits, foreign exchange reserves were at $ 6.008 billion. The country faced a debilitating energy crisis. Four years down the line the growth rate achieved during the 206-17 stands at 5.2%, the highest in the last ten years. The international though predicted a growth rate of 5.3%. The fiscal deficit has been reduced to 4.2 % and further squeeze is expected during the next year as announced in the budget. Inflation has been maintained at a single digit. Foreign exchange reserves stand at $24.258 billion which represent almost four times increase since the present government took over.
The energy crisis that was attributable to the negligence and criminal indifference of the previous governments to the growing energy needs of the country and was hampering progress in the industrial and agricultural sectors in addition to causing difficulties for millions of households across the country, has been checked in its tracks. The power outages have been considerably reduced. Under CPEC power projects with a cumulative production capacity of 10,640 MW have been set rolling and all of them are expected to come on stream by the end of 2018 which means that the energy crisis will not only have been overcome by then but the country would also have enough electricity for the new industrial projects. The government also envisages to add another 30000 MW by the year 2030. The government has also concluded agreement with Qatar for import of LNG and a similar agreement with Azerbaijan for import of LNG is in the offing. Russia reportedly is also interested in exporting LNG to Pakistan. The initiative to diversify the sources of import of LNG is a visionary move to avoid any disruption or crisis due to dependence on a single source.
The PML (N) government very rightly has also been giving top priority to the development of infrastructure. The fact is that all modern growth models invariably rely on development of infrastructure, which is considered as an indispensable ingredient of industrialization and economic growth. The phenomenal economic prosperity and industrial development in Asian countries such as China, South Korea, Singapore and Malaysia during the last three decades is a ranting testimony of this modern reality. The establishment of Asian Infrastructure Investment Bank by China with the objective of development of infrastructure in the Asian countries to spur economic growth is a pointer to that fundamental reality. The criticism by the opponents of the government that giving priority to infrastructure was a wrong approach, lacks credibility and is surely motivated by the political considerations rather than a rational and honest evaluation of the impact that this strategy is going to have on the overall economic situation of the country.
Unfortunately Pakistan has failed to achieve rapid industrialization due to wrong approaches and policies of the successive governments, divorced from the emerging economic compulsions and variables. However it is heartening to note that the PML (N) government has adopted a pragmatic and visionary approach to economic development through building of necessary infrastructure. Peshawar-Karachi motorway which is expected to be completed by 2019 and a network of roads being built across the country will surely act as catalyst to nudging economic growth and bringing about national integration.
Prime Minister Nawaz Sharif was right on money , when inaugurating the first phase of Karachi-Hyderabad motorway he said that people were witnessing the emergence of new Pakistan with improved infrastructure and communication network and the motor ways were life line of the economy. The CPEC is also about building infrastructure which holds the promise of enabling Pakistan not only to make up for the lost opportunities but also to become an economic power house within the next two decades.
In view of the foregoing facts and the future prospects one can safely conclude that Pakistan has a bright economic future and the claims by the Finance Minister that by 2030 the country would join the prestigious clubs of G-20 seem a real possibility, provided the political situation remains stable.
— The writer is freelance columnist based in Islamabad.
Email: ashpak10@gmail.com