State Bank Governor Ashraf Mahmood Wathra has projected the economy as stable and growing at the rate of four percent with stability in macroeconomic indicators. According to him, the economy is not facing any major risk but has been showing remarkable recovery during the last two years and is growing at four percent without any let up in its momentum during the current fiscal year. The key feature of the recovery is macroeconomic stability as budget deficits are contained, foreign exchange reserves have crossed $20 billion mark, inflation is within limits and remittances from Pakistani expatriates are pouring in to finance the trade deficits. The bank chief sees it as a positive development in the background that the economy registered an anaemic growth of less than three percent at a point of time. The economy is projected to achieve a high growth rate in coming years without confronting any major risk from any internal or external factor to its sustainability.
Wathra has correctly pointed out the need for accelerating domestic investment in the country to take the growth to the next levels. But it needs prudent economic and investment policies to go on the road of progress. When the business community of the country is pushed to the wall on one pretext or the other, the fervor of nationalism soon evaporates and the investors start looking options to leave the country. It is unfortunate that the policymakers always prefer to take ad hoc and short term measures to resolve serious issues. A halfhearted effort could bring some positive signs and results at time, but it brings more harm to the economy than any good in the long run. Therefore, the official hierarchy should stop issuing royal decrees to implement the policy decision by force. Instead, there is a need to improve the standard operating systems to implement the government policies. A policy failure is in fact an administrative failure and that is what is going on in this country for the last many decades.
The governor sees a healthy surplus of investable funds in the corporate sector as a welcome sign for the economic recovery. However, unless the investors are given due respect and share in the business opportunities, it would not be easy to achieve the objectives of the economic growth. The foreign investors also look into the local investment climate before putting their money in a risk zone and that is something the officials should understand before launching any offensive against local investors. The problem is in the system and not in the economy.
