Daily Times

Lately everyone seems to be feeling good about a couple of forecasts, released by considered to be reputable organisations and firms, that rank Pakistan’s economy at 20th in the world in 2030. Initially I was rather averse to be the messenger who the entire nation wants to shoot, and after all ignorance is bliss, is it not? And particularly, Pakistanis need a bit of good news now and then, even if slightly misleading, especially after decades of hardships wrought on the nation for no fault of ours. The problem with that theory however is that lured into complacency by a false sense of reality, we have a tendency to collapse in front of the idiot box at prime time and indulge in our favourite pass time of fuelling conspiratorial political theories unleashed by enthusiastic anchors motivated not by national interests but purely by monetary interests linked to ratings.

While the world changes radically and precariously around us, with increasing credible threats on curtailment of individual travel by Pakistanis, coupled with imposition of national sanctions, we continuingly seem to believe that domestic judicial episode and related political rhetoric is far more important, hence deserving our absolute undivided attention. I now sincerely believe that there is a need for a prime time initiative on the electronic media which exclusively focuses on the real issues facing the country such as the economy, water stress, education, employment, international developments and the likes.

Notwithstanding, lulled initially by a sense of economic security curtsey the hype and myths, over and above the actual facts which in certain cases remain ambiguous, associated with CPEC, that for some reason have been bought into even by generally saner elements in the country, the fact that we will be the 20th economy around 2030 seems to have the effect of putting those who matter into deep slumber without even understanding what it means. The general comment by those who remain clueless about the economy is not to worry, we are not is dire straits; unfortunately an understanding of the financials, colours any such encouragements.

So where do I begin? Well at the outset these ranking are based on the size of the GDP projected for countries of the world around 2030. My views on projections based on the marvel of excel worksheets developed from assumptions which remain subject to personal bias are abundantly clear to the regular followers of this column; in today’s rapidly changing technology driven world where world’s super powers are led by absolutely unpredictable leadership, I would be sceptical about predictions for next year, let alone start believing in predictions for 13 years later. Additionally, once again regular readers of this column will recall a previous article on GDP wherein it was argued that this economic indicator itself is an unreliable benchmark for judging the health of an economy; trade balance being the ultimate indicator. To further augment this argument, I refer to a financial headline from another newspaper; Govt borrowing stimulates the economy. In essence this suggests that if the government tripled its borrowing, the economy can potentially soar to new record-breaking heights; so why does not the government do exactly that?

Moving on, for those who still want to throw a party to celebrate the rankings, albeit hey don’t forget to invite me, why in the first place is 20th something to celebrate about? Pakistan’s population is projected to be around 250 million in 2030 which means that we will retain our ranking as the 6th most populous nation in 2030 as well. Now here is the interesting part except for us and Nigeria, ranked 21st by the way, the eight other nations included in the 10 most populous nations in 2030 are also in the top 10 economies as well. Looking from this angle is not very encouraging, is it?

“The economy of Pakistan is the 24th largest in the world in terms of purchasing power parity (PPP), and 43th largest in terms of nominal gross domestic product. Pakistan has a population of over 190 million (the world’s 6th-largest), giving it a nominal GDP per capita of $1,429, which ranks 140th in the world”; this is what you get when you search Google for, “GDP per capita ranking of Pakistan”. So by PPP, which has an amusing connotation for Pakistanis, we are already 24th and should be celebrating; unfortunately, we are ranked 140th in the world by GDP per capita despite the fact that we are currently the 6th most populous nation of the world. I am not sure what our GDP per capita ranking will be in 2030, but based on current numbers, I would not be willing to bet a lot on it being very encouraging.

The problem with living in a dream world is that you lose touch with reality completely. Rather than worrying about where we would stand after a decade, it would perhaps be wiser to focus on the direction in which we are steering the economy currently. It was rather baffling to come across a series of articles in various newspapers where economists battled it out with the Government over the size of the country’s debt, domestic and external. Frankly, it would be appropriate to side with the government in this case, simply because the Finance team is expected to be privy to complete details. That being said, the public altercation between economic pundits does confuse the issue and raises concerns; it would perhaps be productive to discuss and debate points of disagreement since if we misjudge the problem, any and all solutions will definitely miss the mark.

Perhaps this is also the case with CPEC. There remains a segment which insists that significant matters relating to CPEC arrangements made with the Chinese remain obscure and abstruse. There are also views which link CPEC initiative with the endeavours of the East India Company and there are concerns about allowing Chinese companies to cherry pick domestic industry and land in Pakistan; a complete list of whatever we have already sold to them is obviously not available publicly, the concern is that it might not even exist officially which could have repercussions. Undeniably, infrastructure is a necessity for any developing nation and the single most critical catalyst for economic growth, albeit this does not suggest that Pakistan should execute all related arrangements from an unfavourable position. Again perhaps debate and consultations with the economic minds of the nation might be conducive in highlighting problems and solutions which the Governments team might have overlooked. The deals we make today are for and behalf of our future generations; let’s make sure we tick all the boxes, else our actions may come back to haunt our kids!

Today is not about puncturing anybody’s balloons or promoting negativity; the view is that there is a need for transparent and regular interaction between the nation’s economic minds and the government’s finance team to debate and agree issues in the best interest of Pakistan. If we keep walking around with our heads in the clouds, we are more than likely to stumble and fall!

The writer is a chartered accountant based in Islamabad and can be reached at syed.bakhtiyarkazmi@gmail.com