The economy of Pakistan is facing a number of challenges, including falling exports, declining local and foreign investment and piling up public debts. The velour with which the present government had started its journey has been evaporated and positive indicators, which appeared in the first two years, are on downward trajectory. It seems the government has lost its potential and is not interested in doing anything to stimulate the economy. The exports of the country are falling at fast rates with every passing month and year, load shedding still haunts domestic and industrial consumers and $6.15 billion programme of the International Monetary Fund has brought no changes in the lives of the people. Over two million youth are unemployed and the figure is increasing as the job market has shrunk to the minimal level. Thousands of graduates are ready to enter the job market which is already exhausted due to slow economic activities. Thousands of textile units and other industries are either closed or near to close, but the government ministers, instead of paying attention to their respective ministries, are busy in settling scores with opposition leaders. As a result, the economic woes are increasing day by day.
The government has claimed collecting record revenues during the last fiscal year, but public spending is invisible. Instead of encouragement, the business community is pushed to the wall on one pretext or the other without realizing that how the government will generate its revenue when trade and industrial activities are stopped. It seems the IMF programme was a makeshift arrangement as the rate of gross domestic product could not even touched five percent. According to the IMF, Pakistan will have to achieve seven percent growth if it wants to absorb its youth into the local job market. The world donor agencies are prodding the government to enhance tax-to-GDP ratio, but the provincial and the federal governments have increased the rates of taxes for one reason or the other. When cost of production increases, it ultimately affects exports because it makes the Pakistani products uncompetitive in the international market. The government will have to launch an austerity drive by cutting the non-productive expenditures, reduce losses and improve revenue collections by increasing the tax net.
The shortage of electricity and security are one of the biggest hindrances in the way of foreign investment in the country. Instead of relying on the World Bank, Asian Development Bank or any other lending agency, the government should start the economic journey from the ground. The government should understand the ground realities before engaging in a loan programme.
