The economy of Pakistan has been in a shambles for decades. Every government has tried to improve basic components of the economy by ensuring fiscal discipline at the administrative level and giving incentives to the business community.
However, despite the application of all the available methods and resources, the country could not achieve the desired rate of growth and has been turned from industrial and agricultural country into a consumer market and may be, to some extent, a client state. It should be a matter of concern for all and sundry, including political elite, financial managers and entrepreneurs that why serious efforts could not bear fruit.
The economy has been on a roller coaster ride and no one knows what is wrong with it and where the key to resolve the issues lies and even what is the most pressing issue to start with in the first place. There are problems at the administrative and policy levels which need to be resolved but who will bell the cat is another issue.
It is unfortunate that not a single think thank has been set up at the national level to check the pulse of economy and suggest a remedy. This does not mean we are a nation which lacks economic or financial experts, but problem is: the ones who have the solutions to the financial and economic woes have no voice in the official circles and the experts, who are on the government payroll, have to play safe to protect their personal interests. Despite knowing the problems and their solutions, they prefer to keep status quo and like to run the affairs in a routine manner.
The small and medium industry, which is the backbone of any economy, has lost its potential due to electricity crisis, rising cost of production, undue pressure from government agencies and certain steps taken by the previous government for transparency in the banking transactions. The bureaucracy always tries to enforce its rules in the manners of issuing ‘royal decrees’ without developing a mechanism on the administrative level. The rules often cause more harm to the management of national economy than any good. However, when things are messed up, the same bureaucracy withdraws its decree to enforce another one of the same category.
This trend since the inception of Pakistan has changed the shape of every law from customs to finance and from legal system to trade and investment. Even the government officials are sometime confused which of the rules they should have to apply on what situations and which should be held back in what conditions. This confusing situation sometime gives unlimited powers to the black sheep within the government circles to twist the law in their favour and have a fair share in corruption. It is the reason that despite lack of capacity building of the administrative managers, almost absence of coordination within various organs of the government machinery, the bureaucracy is working with its full might.
The economy has been facing long term issues for which emergent steps are required to devise long term planning, but the bureaucracy always opted for makeshift arrangements in every successive government to rid itself of certain problems and move on. This policy of temporary solutions for chronic issues not only disfigured the shape of the administrative management but also finance and economy.
The country has also been facing a chain of negative impressions and may be a sequence of real components which are suppressing its economy such as lack of capacity to produce industrial surplus, low base of direct taxation; disproportional imposition of indirect taxes and inability of the government agencies to keep the currency value at a fair level. The low industrial input means low exports with rising import bill. The government even allowed the import of items which are abundantly available in the country. As a result, the country is facing a huge current account deficit, marring any effort of the current government to set the country at higher growth trajectory.
In the present day world, predictions about emerging and developed economies are changing at a fast rate. Pakistan was one of the candidates for the top 11 economies, but its economy is struggling to sustain even at the current position. On another note, many new aspirants are ready to take a position in the emerging market index.
As a matter of fact, economic prosperity is always linked with business, industry and investment but there are certain areas which need urgent government attention. Before fighting with corruption and ensuring fiscal discipline, the government will have to improve its position on the ease of doing business index as, according to the latest World Bank annual ratings, currently it is at 136th among 190 economies of the world. The second most important step should be to invite powerhouses and software giants from the United States, China and Korea by establishing our own ‘Silicon Valleys’ across the country.
Japan had embarked on the economic journey from small scale industry, China by manufacturing toys, Malaysia from palm oil, Vietnam from light electronic industry and Bangladesh simply from stitching of branded clothes. Pakistan will have to start its economic journey on the basis of one point agenda and that is information technology. The software and mobile phones industry does not need big infrastructure, millions of megawatt electricity, big industrial machinery and physical handling of exportable products.
Pakistan has best software professionals who are already offering their services to foreign clients. There is a ‘trillions of dollars market’ of software applications, games and management products in the world and Pakistan can play a leading role in it. The current government will have to choose a direction and move on.
Despite all sincerity, people at the helm of affairs are, apparently, groping in the dark not knowing which way to move. If you are on the right direction, you will reach your destination one day, but if not the fate of the current government will not be different from the previous one.