A day after presenting fiscal budget for next fiscal year, Minister for Finance Miftah Ismail, addressing a news conference said that priorities of the federal budget are fiscal consolidation and providing relief to underprivileged segments of the society.
Fiscal consolidation entails policies aimed at reducing government deficits and debt accumulation.
There is no denying that government has presented the budget in a very difficult economic situation keeping in view demands of the IMF yet there is a dire need for course correction.
Historically, our country’s economy has experienced frequent boom and bust cycles. Typically, three or four years of relatively higher growth followed by a macroeconomic crisis which necessitated stabilisation programmes.
Periods of high economic growth have almost always led to a widening of trade deficit and an increase in foreign liabilities.
It is because our imports comprise of high valued petroleum products and machinery while exports are low value in nature.
The export base needs to be sufficiently diverse in both its product variety and ability to produce high valued added products that can generate current account surpluses and sustain economic growth.
On the policy front, our economy requires structural transformation i.e. a change in the pattern of what an economy produces and in particular what it exports.
Time has come to bring this change if we really want fiscal consolidation, self-reliance and sustainable economic growth.
It is really important to create an enabling environment in the country that attracts foreign direct investment as well as encourages private sector to enhance their investments in important sectors such as agriculture, industries and Information Technology.
Maximum incentives and facilitation should be extended to bring investments in these sectors.
Especially, farmers need to be given incentives on inputs such as seeds and fertilisers to bolster agricultural productivity.
It is a matter of satisfaction that government has announced some measures for farmers in the next budget yet higher prices of fertilisers are still an issue, which needs to be addressed at the earliest.
It is because of smuggling and higher fertiliser prices that wheat crop this year remained less than previous year.
Now it is being reported that three million tonnes of wheat will be imported to meet domestic requirements.
Pakistan is dubbed as an agrarian economy yet question is how will it come out of balance of payment crisis, if it cannot manage to sufficiently feed its people from its own fertile lands.
A policy shift is required in this vital sector to bolster production of important crops including that of palm oil in order to save valuable foreign exchange.
As regards industrial development, it is time to go beyond mere lip service and take genuine practical steps to make fully operational Special Economic Zones under the multi billion dollars CPEC project.
And most importantly, foreign direct investment will only pour in important sectors provided there is political stability in the country. Both economic growth and political stability are deeply interconnected.
Political parties either in government or in opposition will have to shun the course of confrontation, clash of personal egos and agree upon an economic framework often called the Charter of Economy to unleash true economic potential of this country.
Otherwise, our begging bowl will continue to swell and we have to repeatedly request our friends for financial assistance in the form of deposits, rollover of loans or oil and gas on deferred payment.
Pakistan is a nuclear power and it should be taken towards self-reliance so that it could achieve its due and dignified status in the comity of nations.
