Onwards on path of progress

  • The government has been successful in handling the economy

Pakistan is slowly, steadily, gradually and determinedly moving onwards on the path of progress, development and prosperity and formation of a welfare state by continuing overcoming challenges, problems and difficulties on internal and external fronts collectively by people and the federal government.

Pakistan Tehrik-e-Insaaf (PTI) ‘s federal government headed by Prime Minister Imran Khan came into power following a free, fair, transparent and peaceful July 2018 general election on 18 August 2018.As such it has already moved into the third year out of the stipulated constitutional tenure of five years. The first year was dedicated to measures for recovery of the national economy from the shambles it inherited. The second year , just when most of economic indicators had started an upward trajectory, was consumed in fighting the coronavirus pandemic, saving the lives of the people and helping the poor ,destitute and working class to the maximum extent possible according to available resources. The third year, which is already five months old, is going to be the year of growth (Inshallah) as promised and pledged by the Prime Minister to the people of Pakistan few days back.

As for overall Pakistan’s economic outlook, the fundamental weaknesses of a low tax-GDP ratio, a poor savings rate and minimal export growth with negligible value addition were further attenuated by misaligned policies like loose monetary policy and overvalued exchange rate which made it difficult to control the twin deficits of fiscal and current accounts.

Covid-19 is the biggest challenge not only for Pakistan but the entire world, and the world’s leading economies were reeling from its impact but the world had duly acknowledged Pakistan ‘s success , being ranked among the countries which had tackled the pandemic successfully

However, the shift in economic policy undertaken by the incumbent federal government through its policy of adjustments and structural reforms has changed the course, entailing readjustments in the fiscal and monetary policies. The stabilization measures implemented to reduce the twin deficits had a profound impact on economic activity.

The stabilization efforts paid off in terms of sustained adjustment in current account and continued fiscal prudence. For the first time in many years, the current account posted a surplus in October 2019 and this trend continued. Both the fiscal account and current account continue to show substantial improvement with every passing month. Additionally, stable exchange rate , healthy growth in Foreign Direct Investment (FDI) , improved ranking in World Bank’s ease of doing business index and ‘Stable’ credit outlook to B3 from ‘Negative’ by Moody’s reaffirmed the successful policies of the federal government in stabilizing the national economy. laying a foundation for robust growth.

Nevertheless, the federal government also remained cognizant of the painful impact of the these stabilization measures in terms of economic slowdown, rising inflation, low pace of job opportunities and resultantly its impact on the lowest income groups of the society. In the wake of these challenges , the government initiated reforms in key sectors of the national economy with bringing improvement in the real sector growth through inclusive growth in agriculture, industrial and services sectors.

To check and control prices, the government made efforts through ensuring smooth supply of commodities, and checking hoarding, smuggling and undue profiteering.

Job creation remains one of the key objectives of the economic reforms agenda of the government for which the National Agriculture Emergency Programme, KamyaabJawan Programme (low cost loans to youth for business),Naya Pakistan Housing Programme for construction of six million houses in five years and Ten Billion Tree Tsunami have already been launched which have the potential of creating millions of jobs on a year to year basis.

These federal government policy actions and implementation of comprehensive economic reforms agenda helped the economy in averting the otherwise imminent imbalance balance of payments crisis and subsequently all macro-economic indicators moved towards stabilization.

However, as the economy was transitioning from stabilization to growth , the outbreak of the Coronavirus (covid-19) pandemic during the second half of the last financial year brought multifaceted challenges for Pakistan to preserve the economic gains achieved as a result of various efforts to improve the fundamentals of the national economy.

Similar to the entire world, Pakistan’s economy has also been affected by the covid-19 outbreak through various channels like decline in domestic as well as global demand, downturn in tourism and business travel, trade and production linkages and supply disruptions.

Successful completion of the PTI’s federal government two years in power against all odds were marked not by any large scale jubilation, but a joint press conference by a number of federal ministers and advisers who highlighted the achievements of the government on the national and international fronts.

Briefly, the Kashmir issue was duly internationalized and now the world is talking about the gross violation of fundamental rights of the residents of Indian-occupied Kashmir by the occupying Indian security forces. The PTI government made concerted efforts to end diplomatic isolation and achieve effective representation despite eternal enemy India’s stated policy of isolating Pakistan diplomatically.

Pakistan also made efforts to develop an economic partnership with African countries, populated by 1.3 billion people, by launching the Engage Africa Initiative to increase trade and investment there.

Neutral international observers have acknowledged economic progress made by Pakistan despite the pandemic. Due to the government’s policies, economic observers and organizations like Moody’s, Fitch and Bloomberg have improved Pakistan’s ratings.

Under the Emergency Cash Assistance Programme , the federal government handed over cash to lower-income families hit by the health crisis and millions benefitted.

The government also introduced cheap loans to assist small traders. As a result of government initiatives, the national economy had grown despite covid-19 with exports showing upward trend, and cement sales increasing substantially.

Covid-19 is the biggest challenge not only for Pakistan but the entire world, and the world’s leading economies were reeling from its impact but the world had duly acknowledged Pakistan ‘s success , being ranked among the countries which had tackled the pandemic successfully.

The federal government had also ensured that no supply chains were disrupted despite covid-19 and took steps for gradual and timely reopening of the industries.

On the welfare side, the Ehsas Programme and its various components were described as the country’s largest social safety net and it was indicated that it is being further expanded.

The writer can be reached at [email protected];

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Muhammad Zahid Rifat
The writer is Lahore-based Freelance Journalist, Columnist and retired Deputy Controller (News) , Radio Pakistan, Islamabad and can be reached at [email protected]
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