PRIME Minister Imran Khan on Thursday once again talked about his theme of wealth creation so that Pakistan could get rid of heavy foreign debts.
Speaking at the foundation-stone laying ceremony of 4,000 low-cost apartments being built under the government’s ambitious Naya Pakistan Housing Programme (NPHP) at Farash Town near Islamabad, he said the Government wants to create more and more wealth in the country to retire heavy foreign loans, some of which are causing even more debts.
The Prime Minister has, no doubt, referred to two issues that are directly linked to growth and prosperity of Pakistan.
Even before assumption of power, Imran Khan had very clear views on the mounting burden of debt which has become a major impediment to development but one can assess the success of the government in addressing the challenges from the fact that debt servicing constituted about 41.28pc of the federal budget’s total outlay for the current financial year.
According to the State Bank of Pakistan, gross public debt stood at Rs.24.95 trillion in June 2018 which surged to Rs.36.95 trillion in September 2020, an increase of Rs.12 trillion or 48pc in just more than two years.
Experts point out that the PTI government has broken all previous records of debt accumulation, and has already added more public debt than any other government in Pakistan’s history.
There is also a marked difference in debt acquisition by previous and incumbent governments as loans contracted in the past were used for important projects especially infrastructure development without which the country cannot progress and prosper but the present government hardly has any worthwhile project to its credit.
In fact, acquisition of more loans to pay previous ones is not a prudent approach and that is why the emphasis of the PM on wealth creation matters much.
However, the ideal of wealth creation cannot be achieved in a void and the government will have to provide a congenial atmosphere for the purpose.
The incentives given to the housing sector are steps in the right direction and there are already indications of significant investment in the sector but this is not enough to stimulate growth and create necessary wealth to pay off our loans.
Apart from sector-specific packages and incentives, the Government should also review its overall policies that are pushing the cost of production and cost of doing business upward continuously.
Businesses are increasingly finding it hard to adjust themselves to frequent upward revision of electricity and gas tariff as well as petroleum products; income of the people is squeezing; employment opportunities are narrowing down and purchasing power of the citizens is decreasing.
There is an urgent need to place a cap on policies that trigger price-hike and lead to an increase in the cost of doing business.
Similarly, development spending by the government is considered to be one of the major contributors to economic activities in the country but development budget remained pathetic during the last two years and even budgeted amounts are not released for ongoing projects delaying their completion and resulting in cost escalation.
Initiatives like Lahore’s Ravi Urban Project and Central Business District and Sindh’s Bundal Island have the potential to attract foreign investment, stir overall economic activities and provide employment to hundreds of thousands of people directly and indirectly but the pace of implementation, as usual, is wanting.
The Prime Minister has rightly noted that the construction of two big dams after a gap of five decades would ensure cheap electricity and contribute to enhanced productivity of industries.
His government definitely deserves credit for taking practical measures for construction of these vitally important water reservoirs and the economic future of the country can be saved if more such projects are initiated with the help of our Chinese friends under the framework of China-Pakistan Economic Corridor (CPEC).
We have also been emphasizing in these columns speedy development of special industrial zones under the CPEC can help expedite realization of the Prime Minister’s dream for rapid industrialization but progress on almost all such zones with the exception of Rashakai is very slow.
As the Government has just two years at its disposal, it is important the next budget is prepared keeping in view the vision of the Prime Minister for wealth creation and industrialization.
