After reaching an agreement with IMF (International Monetary Fund), Pakistan is expected to receive $10b from friendly countries and global lenders this fiscal year, which will shore up foreign exchange reserves providing fiscal space to the country to manage its affairs.
However this will only provide a short time cushion and we may face balance of payment crisis once again, if a practical course correction was not undertaken at the earliest.
Addressing a news conference in Islamabad on Saturday, Finance Minister Miftah Ismail gave a break-up of the funds/loans, the country is expected to get in near future.
He said a foreign country will invest $1.5b to 2b in stocks, another friendly country will give gas on deferred payment while another country will make some deposits.
This support will bridge financing gap of $4b.Mr Miftah further stated that the country would also get around $6b from World Bank and Asian Development Bank during current fiscal year.
These inflows will help the country to avoid balance of payment crisis and take matters towards stability.
The friendly countries have always come to our rescue in difficult times and this time also they have not disappointed us and showed traditional open heartedness.
Especially investment from a friendly country in stocks will not only support our foreign exchange reserves but also give confidence to other foreign investors, as a result of which Pakistan Stock Market will get a major boost which was tumbling over last few months due to uncertain economic situation.
With reduction in international oil prices and inflows from friendly countries and financial lenders the economic situation will move towards stability yet sitting government will have to find a permanent solution to lingering balance of payment crisis which haunts the country every now and then.
We appreciate the vision of Prime Minister Shehbaz Sharif for self reliance and to achieve it, our authorities concerned will not only have to pursue the path of frugality but also take requisite steps that give a leapfrog jump to our exports as well as remittances.
There is a need for greater engagement with friendly countries especially China and Saudi Arabia to realise investment promises they had made.
During last visit of Saudi Crown Mohammad Bin Salman, agreements were signed for investment of $20b in Pakistan.
Similarly, several Chinese companies had shown interest in country’s different sectors including textiles.
These investments are the only way the country can come out of current economic quagmire and successfully tread the path of self- reliance.
Investments from these countries will help us trigger economic activity in the country, generate job opportunities and bolster exports.
We must understand that matters will become unmanageable if we did not correct course of our economy.
Thus, main focus should remain on agriculture, industries and IT sectors, apart from exploiting indigenous resources.
The textiles posted a record increase of 25% in exports during last fiscal year. Textiles that make over 3/5th of the country’s total exports earned $17. 62b in the first eleven months of last fiscal year.
The sector should be fully supported to maintain current growth trajectory. Besides, we also need to widen and diversify our export baskets.
Given the talent of our youth, our country can get a major boost in exports by focusing more on Information Technology (IT).
We need to extend incentives for promotion of IT related infrastructure and education to get our share in the international market.
And most importantly, the political leadership will have to demonstrate greater maturity in its conduct while rising above their petty political interests.
Political stability is a must to restore confidence of investors both domestic and foreign and turn around the economy for peace and prosperity in the country.
