Pakistan is 27th largest economy in the world based on its purchasing power, but a quarter of its population lives below the poverty line despite having adequate natural resources and industrial infrastructure. According to experts, internal political chaos, regional instability,energy crisisand lack of interest of developed nations to involve Pakistan in business and tradeactivities are a few causes to be mentioned for poor health of the economy.
The Gross Domestic Product (GDP) in the country has been recorded at $236.62 billion in 2013, which is 0.38 percent of the world economy. Various countries, which started their economic journey years after Pakistan, have now entered the list of developed economies, but when this nation goes one step forward, an unusual situation arises and it has to take two steps back and this situation has been going on since independence.
According to experts, Pakistan needs foreign investment up to 20 percent of its GDP to achieve an average level of economic growth, but foreign investors are shy of putting their money in a country which is marred by political instability. As a result, the cash-strapped government has to look toward international financial institutions such as the World Bank, the Asian Development Bank and the International Monetary Fund to meet the shortfall in its revenues. As a short-term measure, the government has floated $2 billion worth of bonds on international market and the financial experts fear this step will cause further pressure on debt servicing.
According to a World Bank note, a partnership strategy has been structured for Pakistan to help raise standard of living and reduce poverty. The bank has pinpointed four strategic areas to work with the government which are energy, economy, extremism and education.
Pakistan is at the crossroad and if it wants to raise GDP,it has to take decisive actions on mega projects which were conceived years ago and are lying in limbo, including Pak-Iran Gas Pipeline Project, economic corridor with China and Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000). An economically strong Pakistan can ensure peace in the world and the international cooperation can guarantee peace in the South Asian region.
