Agenda for the Future
Now that the national budget for 201112 has been announced, what does it augur for the Pakistani economy? While 2010 may have been one of the worst years in Pakistan’s economic history owing to the super floods and poor economic and financial management, it seems as if 2011 will be no better. The sufferings of the common man continue to increase while his income dwindles. With a total population of some 180 million, this means that 70 million Pakistanis have already slid below the poverty line.
Add to this the fact that the national economy is not accelerating and there are serious apprehensions about foreign assistance being available as generously as it was earlier. This has led the government to borrow more money from the State Bank as well as the open market, further contributing to galloping inflation, less investments and slow economic activities. The only development that lends hope to the gloomy scenario is the growth in textile exports as a result of the EU and USA pledging special access to Pakistani goods and the overall export performance that has hit a record $24 billion this year.
Experts agree that Pakistan’s economy can get a real kick start by generating revenues through offloading some of the white elephants that the government is burdened with, such as PIA, PSO, Pakistan Steel Mills, Pakistan Railways and WAPDA. The government has been borrowing excessively in the previous years to sustain these entities and things have only gone from bad to worse. Every political government has used these organizations to employ party workers that has added to the economic woes of these giant and increasingly inefficient outfits.
One key area the government really needs to put its mind to is the energy sector which currently suffers from a massive circular debt, a syndrome that needs immediate and decisive action so that idle capacity of existing power units can be utilized to run the industry and to push economic and public life forward. Pakistan’s competent economic managers need to draw up an integrated policy that encourages greater investment in key sectors, leading to infrastructure building. A wellthought out and sound policy should also take into account the agriculture sector and ensure that the farmer is appropriately compensated for his produce. Cotton and cotton-based textiles, rice, wheat and sugarcane along with their downstream industries need to be appropriately supported through such a policy.
In the present poor economic conditions that Pakistan finds itself in, it is also important that all incoming aid, grants, loans be directed towards developing projects that have a strategic importance for the country, such as dams, thermal power projects, agriculture development, education and health. At the end of the day it is both sound thinking and honest implementation of economic policies that can save Pakistan from being relegated to the category of failed states