Pak­istan’s Eco­nomic Out­look

Enterprise - - Contents -

Sixty seven years ago Pak­istan gained in­de­pen­dence from Bri­tish rule. At the time, the coun­try found it­self de­pen­dent on agri­cul­ture and was eco­nom­i­cally poor. In the first fifty years, Pak­istan picked it­self up, but nonethe­less it still has a long way to go. War, lack of so­cial sta­bil­ity, in-house po­lit­i­cal clashes, and lack of pop­u­la­tion con­trol, has set the coun­try back in terms of growth and de­vel­op­ment.

Pak­istan’s econ­omy is un­der­go­ing a re­vamp p to re­move con­trols to pro­mote and en­cour­age de­vel­op­ment. The process, pop­u­larly known as Eco­nomic Lib­er­al­iza­tion, aims to draw in for­eign in­vest­ment. The fi­nan­cial net­work of the coun­try is con­trolled by the Karachi Stock Ex­change (KSE), La­hore Stock Ex­change (LSE), Is­lam­abad Stock Ex­change (ISE), and Sialkot Trad­ing Floor. The cur­rency is gov­erned by the State Bank of Pak­istan. The econ­omy is con­trolled by chem­i­cals, fer­til­iz­ers, ce­ment, tex­tiles, min­ing and cash crops such as rice, wheat, sugar, and salt.

The Stock Mar­ket

The stock mar­ket has enough fi­nan­cial re­serves in terms of for­eign cur­rency. Ac­cord­ing to a lead­ing fi­nan­cial anal­y­sis firm, Pak­istan will soon be sta­ble de­spite the cur­rent po­lit­i­cal up­heaval. The LSE and ISE are also show­ing con­sid­er­able growth trends, bar­ring mo­men­tary glitches.

Fuel & En­ergy

The Eco­nomic Co­or­di­na­tion Com­mit­tee and the Fi­nance Min­istry has sanc­tioned a fund of Rs 17 bil­lion for the con­struc­tion of a 500kV trans­mis­sion line. The gov­ern­ment has also con­sis­tently shown that it is will­ing to tackle the de­fi­cien­cies in elec­tri­cal power gen­er­a­tion caused due to ir­reg­u­lar­i­ties in con­trol over the past decade.

In­dus­trial Sec­tor

The in­dus­trial back­bone of Pak­istan is cot­ton, agri­cul­ture, chem­i­cals, and fer­til­iz­ers. It has come to light that the PCGA (Pak­istan Cot­ton Gin­ners’ As­so­ci­a­tion) has ex­pressed con­cern that Pak­istan is im­port­ing cot­ton from other coun­tries de­spite be­ing a cot­ton pro­duc­ing coun­try it­self. The as­so­ci­a­tion has urged the gov­ern­ment to con­sider sup­port­ing the prices of raw cot­ton.

The agri­cul­tural sec­tor of Pak­istan re­lies heav­ily on sea­sonal rains and the In­dus River for ir­ri­ga­tional pur­poses. Low scat­tered rains this year has be­come a cause of worry for farm­ers, es­pe­cially since the coun­try’s ma­jor source of in­come is cash crops. The Pak­istani gov­ern­ment has ini­ti­ated a Na­tional Food Se­cu­rity Coun­cil to pro­mote rea­son­able agri­cul­ture so as to gen­er­ate max­i­mum gain. The Prime Min­is­ter, in re­gard to this is­sue, has stated that: “The coun­cil will be aim­ing at en­sur­ing pol­icy co­or­di­na­tion across prov­inces, agri­cul­ture, and live­stock pro­duc­tiv­ity im­prove­ments, mar­ket re­forms, value ad­di­tion, and prices for en­sur­ing sta­ble in­comes for the

farm­ers.”

Se­cu­rity and Self-De­fense

The Pak­istan de­fence forces are the sev­enth largest in the world in terms of ac­tively em­ployed ser­vice­men. Dur­ing the last 3 decades, the bud­get al­lo­ca­tion for de­fence ser­vices has grown by 200%. This is due to larger coun­tries shar­ing bor­ders with Pak­istan, apart from se­cu­rity and main­te­nance to law and or­der. This bud­get has been in­creased by about 10% in the re­cent past. The rep­u­ta­tion of the Pak­istan Armed Forces took a huge hit when Amer­ica killed and cap­tured Osama bin Laden on their own soil be­cause this showed the world that this vi­o­lent ter­ror­ist was ac­tu­ally liv­ing and thriv­ing on Pak­istani soil.

De­spite con­flict from politi­cians, mil­i­tary of­fi­cers have main­tained that the mil­i­tary’s bud­get is the low­est in the re­gion. Upon the lat­est di­rec­tives from the UN, the Pak­istan Armed forces are ac­tively in­volved in peace keep­ing op­er­a­tions and check­ing in­sur­gency at the Afghanistan bor­der. Pak­istan has also emerged, in the late 20th cen­tury, as a nu­clear power and claims that its nu­clear arms pol­icy is solely to dis­cour­age at­tack.

Pak­istan’s Eco­nomic Out­look

Pak­istan may have made a cou­ple of right moves but it has some se­ri­ous is­sues that need to be over­come. The cor­rup­tion in the gov­ern­ment is trou­bling which does not bode well for cor­po­rate sec­tor to have the abil­ity to ex­pand and to take risks. Pak­istan must con­trol its rad­i­cal el­e­ments to at least keep pace with ri­val In­dia if not the en­ergy rich Is­lamic na­tions such as Qatar and Saudi Ara­bia.

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