Daily Times

If only there were a potion or a spell to fix the broken economy, no one would question the financial wit or require the economic wizards. Alas! The reality is far from fiction and, in Pakistan’s case, much more complicated.

With over 70 years of indecisiveness and experimentation, we witnessed the long-overdue financial planning with the advent of Mr Shaukat Tarin. But did it all come too late? Every newspaper and economic commentary termed Pakistan’s economic growth target of 4.8 per cent over-ambitious, and some even called it “unachievable.”

According to the World Economic Outlook Report for October 2021, Pakistan’s economic growth is projected at four per cent for the FY2022. On the other hand, in September, the US-based credit rating agency estimated the growth percentage to be 4.2 per cent, while the Asian Development Bank also agreed at the modest four per cent figure.

But is achieving the 4.8 per cent economic growth target all that important?

The World Economic Outlook Report also predicts a sharp increase of 2.5 per cent in the Current Deficit, while a 0.4 per cent decrease in the Consumer Price Index and 0.2 per cent decrease in unemployment to 8.5 per cent and 4.8 per cent, respectively. The significant factors contributing to the economy’s slow growth are the highly unpredictable delta variant of Corona Virus coupled with a volatile geopolitical regional scenario. In research by Fraser Institute on Economic Freedom, Pakistan was scored 5.95 out of 10. This downward trend is a continuation from 2016 where Pakistan scored 6.07. So how is economic freedom related to growth?

By focusing on the “agriculture transformation plan,” the government has dramatically shifted its focus towards promoting domestic agriculture.

The increasing taxes and regulations lead to less economic activity and a slow injection of investment, slowing down economic growth. Economic freedom in a country leads to prosperity and enhanced political and civil liberty and measures governmental regulations and spending, Trade freedom, governmental transactions, and more. So Pakistan may have scored low on the economic freedom front; we must always look at the bigger picture while discussing the state of the economy. I firmly believe that with all the reformative and structural changes introduced by the government to set the right direction for its economy, a low score on the Economic Freedom survey is not a bad indicator. It simply solidifies that the current government is building institutions from the ground up. The most significant indicator of the fact is yet another record collection by the FBR with a whopping Rs. 41.89 billion and an increase in the tax filers’ base to 2.2 million registered taxpayers.

What the masses must understand is that Pakistan’s economic resurrection is dependent on the recovery of private investment, the revival of the agriculture industry, the inclusion of youth including men and women alike in the economic sphere, and the jumpstart of Small and Medium Enterprises, higher governmental spending on the public development programmes stable trading relations and more.

Upon objectively analysing each of the factors mentioned above, we will be able to see things on a macro level context and deduce a better idea about our economic health. The government has put in the greatest effort in reviving agriculture with programmes like “kamiyab Kisan.” There is a special focus on improving agriculture mechanisation, water utilisation, seed development, and entrepreneurial venture. By focusing on the “agriculture transformation plan” through easy loan schemes, Kisan Cards, and international collaboration on improved agri-practices, the government has dramatically shifted its focus towards promoting domestic agriculture to control the rising food inflation that continues to grow on a 3.8 per cent monthly basis.

The Kamiyab Jawan Programme is yet another initiative to boost access to youth skills development and entrepreneurial abilities. Pakistan has one of the world’s youngest populations that, without proper direction, may become its most significant challenge. Under this flagship initiative, the government intends to provide skills to over 50,000 unemployed youth. Also, with Rs. 100 billion dedicated for business, the inclusion of young adults, is a solid step towards economic reformation.

Simultaneously, the revival of the SME industry is equally important, with this sector being continuously ignored and the financing ratio on a decline from 9.2 per cent to 7.27 per cent. The strengthening of the domestic economy will be a major game-changer in boosting economic growth. The current government is targeting disbursement of Rs. 60 billion through commercial channels as part of its clean and collateral-free loan programmes.

Also, with social sector development schemes like the Ehsaas Programme or the Kamiyab Pakistan Programme, consolidated efforts have been taken for poverty alleviation for the first time in the country’s history.

Therefore, the bottom line here is that with all the government departments aligned and working in unison towards a common goal of economic uplifting and resurrection, the main focus should be on continuing this momentum and direction without losing focus on the goal. The final percentage of the economic growth should not be the ultimate determinant of the challenges and hindrances Mr Imran Khan and his team have overcome. The reformative action should gauge the economic progress and its long-lasting impact, and the numbers will follow.

The writer is Special Advisor (Pakistan Institute of Management) and Foreign Research Associate (Centre of Excellence, China Pakistan Economic Corridor). He can be reached at hassnain.javedhotmail.com