Democracy has been restored in Pakistan, but fundamental factors are missing and people are not lucky enough to reap the benefits of the people’s government. The countries, which were far behind Pakistan in trade and industry, are emerging as successful economies. The successive governments in Pakistan have miserably failed to restore peace, overcome acute electricity shortage and provide conducive environment for economic growth. The economy of Pakistan is not on the right track and the government is unable to find a way out to deal with even basic issues such as development of infrastructure and the rule of law. Pakistan has a perfect economic engine in the form of strong industrial base and human resources, but it is not being allowed to work properly.
According to the Economic Freedom of the World Report, which has reviewed fundamental factors across 152 countries in 2014, Pakistan’s performance is the worst in the region. Taking a cue from the International Monetary Fund, World Bank, and World Economic Forum, the report covers the size of government, legal system and property rights and international trade. The project is a whistleblower for the developing countries to understand the key elements adversely affecting their economic performance.
As a matter of fact, the thrust of the Pakistani government is on politics rather than economy. The countries in the region have successfully shifted their focus from politics to economy such as India and Bangladesh, but in Pakistan, the federal and the provincial governments are still lingering on the hackneyed path. The country is facing severe balance of payment problems and extreme mismanagement in the financial discipline. The non-development sectors remained priority areas of the government; as a result, the government is filling the gap between income and expenditures by taking more and more loans from international donor agencies.
The government has to set priorities before embarking on a new venture. First of all, it has to improve law and order by depoliticizing civil forces and improve energy supply by building crucial dams by setting aside political constraints. It will also have to reform tax system by studying different systems in different countries. Economy of several countries, where the ratio of tax is minimal, is growing fast which means imposition of bulk of taxes does not guarantee economic growth. There is a need to encourage cross border trade within the countries in the region by giving relief in customs tariffs and duties. Small steps could have big impact on the economy and the government should take it as a challenge and not as a burden.