ISLAMABAD: Though the political parties realise the grave economic situation of the country, they have not shared their strategy of dealing with the immediate challenges on the economic front in their manifestos shared recently.
All the major political parties including Pakistan Peoples Party (PPP), Pakistan Muslim League Nawaz (PML-N) and Pakistan Tehrik-e-Insaf (PTI) have not disclosed what they would do to meet the immediate needs of economy, which, what the economists say, presently lies on ventilator and needs extraordinary measures on an emergency basis to put a hold on the further erosion. The parties however admit that the first task facing the incoming government will be to deal with the external and fiscal imbalances and mounting public debts left behind by the last government.
Though PTI’s nominated candidate for finance minister, in case the party wins next election has openly admitted that his party will have no option but to seek immediate economic bailout package from International Monitory Fund (IMF) or other sources to avoid the risk of defaults, his party too has not mentioned the immediate steps needed to save economy.
According to an economist, political parties should have mentioned the required measures they may take after taking charge of the government. “Since the parties present the manifestos for five years, they might have avoided the steps to taken in the first year of next government,” he said adding that investors, industrialists are more interested to know how the next government would deal with the prevailing economic situation.
As per the manifesto for 2018-2023, PPP has however mentioned that the next government will have no choice but to deal with the coming crisis. “It will need to be cool-headed and credible, particularly as painful measures will need to be taken and vulnerable populations will need to be protected from fallout,” it said.
“We, pledge immediate measures for course correction, but also deeper reforms in agriculture, trade and industry, labour rights and welfare, natural resource management, energy, taxation and resource mobilisation, and infrastructure which will form the basis for rebuilding our economy,” the party says.
As immediate measures for course correction, PPP claims, a. An independent and rigorous assessment of the macroeconomic situation, including public debt, external imbalances and fiscal imbalances b.Setting up of working groups of Pakistani experts on all aspects of the economic crisis c. Initial contacts with key global economic players for agreement on a home-grown plan for stabilization and a mechanism for evolving a consensus on a Basic National Economic Reform Agenda for the medium term.
PML-N which completed its five years term recently and left the present state of economy for the next government to face, has also given no immediate way out of the crisis. However the party which claims economic revolution it brought during past five years, has talked about long term goals in its manifesto for next five years. In Its manifesto, headlined with the slogan “Vote ko izzat do — khidmat ko vote do” (Honour the vote — vote for performance), the party promises, pledged to aspire for economic transformation by raising the GDP growth rate to over 7 per cent, expand scope of investments, minimize losses in state-owned enterprises, eliminate poverty by 2030 through welfare programmes, enable enterprise creation and employment, impart technical training among people, continue tax reforms to raise the tax-to-GDP ratio from 13pc to 16pc, create at least 100,000-200,000 jobs, expedite completion of long-term CPEC plan, promote value addition in agriculture and increase productivity, assist farmers with a farmer support package, increase the size of the IT industry from $3.1 billion to $10bn, expand e-governance and citizen-centric services, improve Pakistan’s ranking to the top 50 on tourism and competitive index, add 15,000MW of power by 2025, including 5,000-7,000MW through Thar coal and hydroelectricity and many others.
PTI, which is the most aspirant to form next government in the center, has also not mentioned the immediate measures needed to come out the present economic crisis. It, however, in its 100-day plan has made many promises, which could be taken as immediate measures, it pledged.
The party in its manifesto, has claimed that it will reform FBR and increase the tax net through a robust tax policy, efficient tax administration structure and effective enforcement mechanism as the country’s current Tax to GDP ratio is significantly less than the ratio required to sustain our growing fiscal expenditure and to pay-off the massive national debt accumulated over the last decade.
The party also pledges to incentivize businesses to become a part of the formal economy, thus adding larger sources of tax income to the national exchequer.
According to manifesto of the party, PTI will strengthen the labour market and create 10 million jobs over 5 years in key sectors: SME, housing, ICT, health, education, green economy and tourism.
PTI will put Pakistan in the top 100 economies of the world according to the World Bank’s doing business rankings in five years.
Unlike previous governments, PTI is committed to delivering an industrial strategy that contributes to growth and employment, and encourages SMEs to scale up and move toward value-added exports.
The party will build the “Council of Business Leaders” chaired by the PM to improve “Doing Business” in Pakistan, to attract investment, encourage participation of overseas Pakistanis and grow exports and bring the country within the top 100 in Doing Business rankings in 5 years from the current position of 147
Immediately begin work to shift towards sustainable and affordable energy. Address root causes of circular debt, initiate regulatory reforms designed to move away from rent seeking models and towards increasing system efficiency and recovery of losses.
Ensure National Financial Inclusion Strategy implementation is streamlined and capitalizing on the digital ecosystem. Develop a plan to increase deposit base of banks to 50% of GDP to encourage higher savings. Expedite establishment of an infrastructure lending bank for large projects.
It may recall here that Pakistan’s next government, to be chosen in a July 25 election, faces growing fears of a balance of payments crisis with speculation it will have to seek its second IMF bailout in five years.
According to economists the central bank is running down its foreign reserves and devaluing the currency in a bid to bridge a yawning trade deficit, and the winners of the July 25 election will have “limited time” to act. The most important (challenge) will be how to protect Pakistan’s balance of payments, how to build Pakistan’s foreign exchange reserves and how to fix its fiscal position.