Tough choices ahead

WHOEVER forms the next government will have to take tough and bold measures to address the malaises afflicting economy of the country. That the economy is currently in bad shape is evident from a number of indicators and analyses being released by bilateral and multilateral donors. It should be a cause of concern that according to an IMF report released Tuesday, Pakistan was among 15 top deficit economies of the world in 2017 when its current account deficit increased to $12.4 billion.
The country had a current account deficit of just $3.1 billion, which was 1.3 percent of GDP in 2014 and the subsequent year it decreased to $2.7 billion, one percent of GDP before doubling in 2016. This is one of the major causes of the financial and economic crunch being faced by the country and remedial measures will have to be taken on a fast-track basis to discourage unnecessary imports but without burdening the common man. The situation would complicate further if we did not pursue a coherent and effective strategy to increase manpower export as remittances by overseas Pakistanis contribute significantly in meeting foreign exchange requirements of the country but the amount might decrease in future due to repatriation of manpower from some countries especially Gulf States. But the long-term and sustained solution of the problem would be industrialisation and increase in exports, which have been dwindling over the years despite incentives and packages given by the government.
The PML (N) government doled out Rs 32 billion in cash support for promoting exports of textile and clothing in the last one and half year while additional incentives were also available under GSP plus scheme of the European Union. However, the exports did not increase correspondingly due to a variety of reasons. The previous government also focused on infrastructure development and ensured increased availability of gas and electricity for industry, which would go a long way in attracting investment but devaluation of rupee and increase in oil prices, electricity and gas tariff hiked cost of production, rendering our products non-competitive. There should also be focus on value addition and technology upgradation if we want to remain relevant in highly competitive market.

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