There was chest thumping euphoria during Nawaz Sharif’s tenure that the economy had been on a growth trajectory since his returned to power in 2013. The government also claimed that the gross domestic product registered an increase of 5.3 percent during the financial year 2016-17, but the bubble of claims burst after a few weeks of Nawaz’s ouster. There was a claim of the highest growth in one decade despite slowdown in industrial sector and bleak performance of the large-scale manufacturing units. Some also questioned the claims of highest GDP growth in an environment of industrial slump and drastic fall in the export volume despite achieving the GSP plus status from the European Union. However, experts believe the economy found its own way forward after the domestic consumption came as the driving force for growth in the domestic industry. Despite fall in the export volume, increased domestic consumption supported the GDP growth. The private investment specifically played pivotal role in boosting the industrial output. According to reports, the share of domestic consumption remained 7.9 percent last year from 6.2 a year ago. The foreign investment is welcome, but domestic investors also need encouragement to stop capital flight.
According to economists, private investment worked as a driving force to provoke industrial activities in Japan and Scandinavian countries after the World War II and it is still the best option for the developing economies. The private investment needs to be encouraged in auto industry, food processing and cement sectors to meet the growing demand of domestic consumers. There are several other sectors where the small and medium organizations should be encouraged to participate under a specific industrial policy. The former prime minister came to power with claims that his motto would be business, business and business, but he forgot his promises and engaged himself in political conflicts with his rivals. This not only cost him his government, but also brought economic slump all over the country. The government is still seeking loans from international donor agencies without realizing that loans will add burden to the national economy and debt servicing will become a snowball in coming years. Instead of mortgaging the coming generations to the foreign lending agencies, it is better to facilitate local investors to participating in the industrial development programmes. The population of the country is increasing and sooner the government introduces a clear cut investment policy, the better.
