By Tasneem Yaseen
A stable and strong economy is the need of the hour for Pakistan to be able to move forward and provide its people with the necessities of life. Prime Minister Imran Khan and the government have in recent months focused on improving the economy and are working hard to resolve issues and work on problems that had led to a stagnant economy. All stakeholders are in agreement that there is no magic wand to fix the economy, what it requires is hard work and commitment.
The coming months are going to be tough but support from the IMF and friendly countries like Saudi Arabia, China, and the UAE provide some breathing room. Promoting manufacturing by creating a more investment-friendly environment, broadening its tax base, and encouraging innovation and modernization in export-led industries are just some of the measures the government can take to address the growing fiscal and current account deficit.
Pakistan and International Monetary Fund (IMF) have agreed in principle on a three-year loan programme that would also pave way to receive loans from other multilateral institutions like World Bank (WB) and Asian Development Bank (ADB). An IMF mission will be visiting Pakistan by the end of the month to finalize matters. The IMF has stressed that economic pressures underscored the urgency of lifting medium-term growth with structural reforms such as measures to improve business environment and governance, enhance labour market flexibility, and increase the tax base. It is imperative to note that slowing global growth and trade, as well as geopolitical tensions and other potential external shocks pose economic challenges. These trends heighten the urgency of implementing reforms that bolster economic resilience and secure inclusive growth. So we need to make some hard decisions as soon as possible.
Pakistan recently received $2 billion from the United Arab Emirates (UAE) through the Abu Dhabi Fund for Development (ADFD), which provides concessionary development loans. And in February, the Crown Prince of Saudi Arabia, Mohammad bin Salman, signed seven Memorandums of Understanding (MoUs) with Pakistan, pledging up to $21 billion worth of investment over the next six years. These are beneficial developments but we as a country need more foreign direct investment (FDI), instead of relying so heavily on foreign aid. According to the World Bank’s Ease of Doing Business report, Pakistan ranks 136th out of 190 economies. To improve this ranking and draw more investment, change in policies is required.
While there is a focus on falling rates of the rupee it might be noted that exports have almost remained the same. The fact that there has been no growth in the export sector is to be pertinent as the previous government failed to make any significant progress in enhancing exports. Having inherited this economic crisis from the previous government, the PTI government, led by Prime Minister Imran Khan, has taken on an enormous task. This task is definitely achievable with strength of will, time and effort.
For this, difficult decisions were made and the good news is that these difficult decisions are yielding dividends: the deficit is reducing, exports are increasing and imports are declining. Further reforms will bring about sustained growth of the economy and hopefully this is just the beginning of a mobilized economy.
Economy is the paramount concern of the government as it realizes that without a robust economy Pakistan cannot thrive. Sustainable financial growth and a stable society will lead to prosperity, better living standards and future gains. The people of Pakistan deserve a fair chance, all they want is t0 be able to earn a livelihood and see their families prosper. It is not too much to ask.