In its new report on the Global Economic Prospect, the World Bank has painted a bleak picture of the Pakistan’s economy, predicting that the country is likely to miss the annual national output target of 5.1 percent in 2015 due to political tension, persistent energy crisis,and weak security situation. The World Bank has partially held the protest campaign launched by Pakistan Tehreek-e-Insaf responsible for disturbing the pace of economy recovery.However, the bank has also cited energy crisis as another reason for slow economic growth and projects the revised growth target at 4.7 percent.According to Finance Minister Ishaq Dar, the reason for the slow economic growth is the army operation in the tribal areas.
The bank has also warnedagainst possible disappointment on unresolved structural issues which could depress investment bydamaging the confidence of investors and underminingthe support program launched by the International Monetary Fund for Pakistan. The bank says that the European Union had allowed market access to the Pakistani products by granting Generalized System of Preferences (GSP plus)status to it, but the country could not get full benefits of the concessionsdue to persistent energy crisis. Regarding electricity shortage, India, Nepal and Bangladesh are also facing the same situation, but in Pakistan’s case the share of manufacturing sector is either dwindling or is not at par with the other developing in the region or the emerging economies. It says that at least 3.1 million people are registered with the income tax authorities, but only less than 900,000 filed their tax returns last year. On another note, a complex method has been enforced with regard to the rates of personal and corporate income tax in the country.
It is the time for the policy makers to take drastic measures to address the key issues pointed out by the World Bank, including the electricity shortage which has disturbed the overall production volume. It is not very long ago whenPrime MinisterNawaz Sharif, soon after assuming the office, had declared that the main priority of his government would be business, business and business. The factual position one and half year after assuming the office is that his cabinet ministers are only interested in salaries and perks, and business has become a misplaced priority.According to experts, billions of dollars remittances, sent by the expatriate Pakistanis, provide a great help to the government to resolve the balance of payment problems and improve forex reserves.However, the government should have to find permanent sources of income generation. The answer lies only in the business and investment.