Muhammad Zahid Rifat
PAKISTAN is gradually and determinedly moving onwards on path of progress, development and prosperity and formation of a welfare state by continuing overcoming challenges, problems and difficulties on internal and external fronts collectively by people and the federal government. Pakistan Tehrik-i-Insaaf (PTI) ‘s federal government headed by Prime Minister Imran Khan came into power following peaceful general election on 18 August 2018. As such it has already moved into third year out of five years stipulated constitutional tenure. The first year was dedicated to measures for recovery of the national economy from shambles it was inherited. Second year, just when most of economic indicators had started upward trajectory, was consumed in fighting the pandemic of Corona Virus, saving the lives of the people and helping the poor, destitute and working class to the maximum extent possible according to the available resources. Third year, which is already five months old, is going to be the year of growth (Inshallah) as promised and pledged by the Prime Minister to the people of Pakistan few days back.
As for overall Pakistan’s economic outlook is concerned, the fundamental weaknesses i.e. low tax ratio to Gross Domestic Product (GDP) poor savings rate and minimal export growth with negligible value addition were further attenuated by misaligned policies like loose monetary policy and overvalued exchange rate which made t difficult to control twin deficits of fiscal and current accounts. However, the shift in economy policy undertake by the incumbent federal government through its policy of adjustments and structural reforms has changed the course entailing readjustments in the fiscal and monetary policies. The stabilization measures implemented to reduce the twin deficits had a profound impact on economic activity. The stabilization efforts paid off in terms of sustained Adjustment in current account and continued fiscal prudence. For the first time in many years, the current account posted a surplus in October 2019 and this trend is continued .Both fiscal account and current account continue to show substantial improvement with every passing month. Additionally, stable exchange rate , healthy growth in Foreign Direct Investment (FDI) , improved ranking in World Bank’s ease of doing business index and ‘Stable’ credit outlook to B3 from “Negative” by Moody’s reaffirmed the successful policies of the federal government in stabilizing the national economy laying a foundation for robust growth.
Nevertheless, the federal government also remained cognizant of painful impact of the these stabilization measures in terms of economic slowdown, rising inflation, low pace of job opportunities and resultantly its impact on the lowest income groups of the society. In the wake of these challenges , the government initiated reforms in key sectors of the national economy with bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors. To check and control the price, the government made efforts through ensuring smooth supply of commodities. Checking hoarding, smuggling and undue profiteering by the vested hoarders and black marketers. Job creation remains one of the key objectives of the economic reforms agenda of the government for which National Agriculture Emergency Programme, Kamyaab Jawan Programme (low cost loans to youth for business), Naya Pakistan Housing Programme for construction of 6 million houses in 5 years and Ten Billion Tree Tsunami have already been launched which have the potential of creating millions of jobs on year to year basis. These federal government policy actions and implementation of comprehensive economic reforms agenda helped the economy in averting the otherwise imminent imbalance balance of payments crises and subsequently all macro-economic indicators moved towards stabilization.
However, as the economy was transitioning from stabilization to growth, the outbreak of Corona Virus (COVID-19) during the second half of last financial year brought multifaceted challenges for Pakistan to preserve the economic gains achieved as a result of various efforts to improve the fundamentals of the national economy. Similar to the entire world, Pakistan’s economy as also been affected due to COVID-19 outbreak through various channels like decline in domestic as well as global demand, down turn in tourism and business travel, trade and production linkages and supply disruptions. Successful completion of PTI’s federal government two years in power against all odds were marked not by any large scale jubilation but by a joint press conference by a number of federal ministers and advisors who highlighted the achievements of the government at the national and international fronts. Briefly, the Kashmir issue was duly internationalized and now the world is talking about the gross violation of fundamental rights of the residents of Indian occupied Jammu and Kashmir territory by occupying Indian security forces. The PTI government made concerted efforts to end diplomatic isolation and achieve effective representation despite eternal enemy India’s stated policy of isolating Pakistan diplomatically. Pakistan also made efforts to develop an economic partnership with Africa countries , populated by 1.3 billion people, by launching Engage Africa Initiative to increase trade and investment there. Number of neutral international observers have acknowledged economic progress made by Pakistan despite novel Corona Virus crisis. Due to government’s policies, economic observers and organizations like Moody’s, Fitch and Bloomberg have improved Pakistan’s ratings.
—The writer is Lahore-based Freelance Journalist, columnist and retired Deputy Controller (News), Radio Pakistan, Islamabad.