Flabbergasting, Pakistan’s economy is in the throes and facing some serious quandaries, that has put the future of this nation at stake. There is no denying; economy plays a consequential role in the progress and development of the country. In today’s globalised world where markets hold a vanguard position and economically strong state can play its proactive role to fulfill its national interests. China and the USA are the shining examples. Unfortunately, Pakistan has failed miserably to take advantage of today’s globalised village.
If we check the statistics Pakistan’s economy is 41st largest in the world. Its total size is 313 billion USD or 0.3 trillion USD in terms of GDP. The Fiscal Year 2018 was the worst in the economic history of Pakistan. Additionally, increased oil prices, trade protectionism and regional rivalries affected many developed as well as developing economies. However, in Pakistan situation got more threatening due to insufficient foreign exchange reserves, increased import bills, deteriorating trade balance and stagnant remittances that had put the already fragile economy on the ventilators. Since, Imran Khan had occupied the position at the helm of affairs, he had been facing some serious economic conundrums, and as a result, he failed to take off the nation economically.
On one hand, Pakistan’s foreign debt has reached to 106.9 billion USD to pay circular debt and on the other hand Fiscal deficit widened to 8.9% of Pakistan’s GDP. The deficit amounts Pakistani rupee 3.445 trillion. Similarly, Trade deficit had also touched the historic heights of 31.8 billion USD as well as Foreign exchange reserves plummeted to deadly level. Pakistan was at the verge of default. So Imran Khan left with no other option than to knock at the doors of the IMF, UAE, KSA and China for financial help. Furthermore, energy crisis, water scarcity, over population, terrorism and non-traditional security threats are the prominent causes that have poured oil into already devastated economy and plunged the nation in the pit of obscurity.
Repercussions of abysmal economic condition can easily be palpable in the form of increase in inflation rate. According to Pakistan Bureau of Statistic, inflation has reached to 10.5% measured in Consumer Price Index. Moreover, clouds of unemployment looming over the youth that comprises 60 % of total population.
However, it is the need of the hour and a gigantic responsibility on the shoulders of Imran Khan to take up the cudgels and brings Pakistan’s obsolete economy from the era of distress tostabilization. Now, at this critical juncture keeping into consideration some valuable steps can easily keep the economy afloat.
Firstly,friendly business environment is a cornerstone in the development of any economy. No doubt World Bank has shown positive signs of doing business in Pakistan. In 2019 Pakistan was at 136th now it jumped to 108th position. In addition to secure a slot among the top 10 nations with the most improved business climate. But policymakers have to ensure the continuity of this trend and remove impediments that facilitate the flow of FDI.
Secondly, security is pre-requisite for providing safe economic ambiance. There is no denying the impression that terrorism has engulfed nation economically and wreaked havoc. Lamentably, becomes the major cause of capital fly out to other countries. Fortunately, Pakistan has overcome this menace to a great extent and the credit goes to our brave law enforcement security forces that fought gallantly and weed out the terrorism from the soil of pure. In a report of Pakistan Institute for Peace Studies, terrorist attacks in the year 2019 decreased by around 11 % as compared to 2018 and the number of people killed in these attacks reduced to 40 %. But the risk is still present to make Pakistan the destiny of peace for foreign investment.
Thirdly, as afore-mentioned, fiscal deficit had reached to new heights and created economic backwardness. Government deserves applaud for starting austerity campaign throughout the country. It is a welcoming sign but policymakers should chalk out some bold reforms like to cut down the VIP protocol budget that is 5 % of total GDP. It is an irony for that country which spent less than 2 % of its GDP on health.
Fourthly, Pakistan possesses the great potential to become a tourism destination, especially religious tourism. The Kartarpur Corridor is the prominent example. Eye-catching and snowcapped mountains of northern areas are yet to discover. Recently, UN has listed Pakistan among the top 10 tourist destinations of 2020. So, tourism can easily harbinger economic revolution inside the country.
Fifthly, government must increase its Tax collection base through direct taxation system and to strengthen FBR. Similarly, exports are the touchstone for today’s modern economy. So, government must design policies that facilitate exporters that ultimately benefit the economy.
It is a well-documented fact that Pakistan’s economy is on the ventilators and clouds of distress are hovering over it. But it is evident beyond an iota of doubt that by taking into account above-mentioned remedies can easily reinvigorate the economy.