A better economic future
REPORTEDLY, the visiting World Bank President Dr. Jim Yong Kim in his meeting with Prime Minister Nawaz Sharif expressed full support for the tough economic decisions of the government in regards to structural reforms and acknowledged the fact that Pakistan had achieved phenomenal success in regards to improvement in the security situation, arresting the burgeoning energy crisis and bringing macro-economic stability. He remarked that escape from the risk of bankruptcy that Pakistan faced in 2013 was a big gain for the country. Later speaking at a function of the State Bank he stated that Pakistan was poised to perform better on the economic front and lifting people out of extreme poverty.
The endorsement of economic revival and improvement in the security situation by the head of a prestigious international lending agency like the World Bank undoubtedly reinforces the credibility of the government claims in this regard. The sitting governments all over the world have the disadvantage of incumbency and crisis of credibility and there are always diehard critics of the government who invariably have a cynic view of the claimed achievement of the government and even try to denigrate everything associated with the government. The best rebuff to their antics and machinations is the endorsement of those achievements from the independent sources. What the World Bank President has said should be enough to silence the critics of the economic agenda and eco- nomic strategy of the government.
The World Bank in recognition of the improvement in the state of the economy has already agreed to provide $ 10.2 billion to Pakistan during the next five years for policy reforms in the energy sector, revenue mobilization, governance, social sectors and investment in hydro power. It is pertinent to point out that not only the World Bank but also ADB and IMF have repeatedly acknowledged the turn-around in the economy and the success of the economic initiatives of the government. The international media is also on record to have appreciated this success story.
Managing an economy like Pakistan is probably the most arduous undertaking, especially reviving an economy languishing at the edge of a precipice. When the PML-N government was installed in May 2013, the country faced a severe energy cri- sis. Economic growth was below 3%, inflation was at double digit, interest rates were high, budget deficit was at 8.8% of GDP, investments were abysmally low, foreign currency reserves stood at the lowest ever level and the country faced the prospect of an ignominious default on IMF loans.
To begin with, the government without wasting a moment, successfully negotiated $6.4 billion Extended Fund Facility with the IMF to avoid default on IMF loans. With a view to fix the maladies afflicting the economy and making it a vibrant agent of change the government rightly focused on macro-economic structural reforms, expansion in tax net, investment in infrastructure, tackling energy crisis and initiatives aimed at reducing budget deficit. Consequently a discernible turn around in the economy has been effectively orchestrated.
The budget deficit which stood at 8.8% in 2013 has been brought down to 4.8%, inflation has been reduced to 4.53%, credit to agriculture sector has increased to Rs.515.87 billion, development spending has touched Rs.427.67 billion, GDP growth which was in the vicinity of 3.1% has been enhanced to 4.24%, per capita income has increased to US$1513, foreign exchange reserves have reached the highest ever US$ 20 billion mark and stock exchange has touched new heights. The confidence of the international investors in Pakistan has also been strengthened as was evident from the response that Pakistan received on the issuance of Euro Bonds which came from all geographical regions of the world. This response undoubtedly was a result of the strenuous and consistent efforts of the economic managers of Pakistan to showcase the marked improvement in economic indicators and the success of the economic reforms introduced by the present government at all the international economic forums.
The success of the foregoing initiatives depended on improvement in the security situation in the country, especially taming the threatening phenomenon of terrorism. The PML-N government, honestly speaking, showed rare courage by launching a crusade against terrorism in the form of Operation Zarb-e-Azb and National Action Plan with the consensus of all the political forces represented in the parliament and the unqualified support of the military leadership. The success of the operation and other initiatives of the government has undoubtedly improved the security situation in the country.