Federal Minister for Planning, Development & Special Initiatives Prof. Ahsan Iqbal on Saturday put forward the fact that political instability and adventurism had been the biggest threat to Pakistan’s economy.
He was speaking at a Round Table Conference on “Pakistan’s Economics”, jointly organized by the Planning Ministry and the Lahore School of Economics, in Lahore. The minister said in 2018, the outgoing government’s Public Sector Development Program (PSDP) was worth Rs 1000 billion and Defence Budget was Rs 1000 billion as well – Whereas in 2022, the PSDP was reduced to merely Rs 500 Billion or less and “PTI’s government started to default on public payments in their last financial quarter”. Iqbal said that in order to earn policy dividends, there needed to be continuity as policies take root, grow, evolve, and start bearing fruits over a decade. Thus, policy efforts to expand a resource base in Pakistan (undertaken by the PML-N’s government in its tenure) failed to bear fruits because they became a victim of political instability.
The planning minister further added that the ongoing debate around the economy must not discount the political landscape and its challenges as economic measures or woes are not in. He said in this Vision 2010, it was identified that Pakistan must expand its energy capacity (despite the fact that Pakistan was an energy surplus in 90s). Similarly, the minister said that in 2013, his office came up with ‘Vision 2025’ that envisioned Pakistan becoming one of the top 25 economies by 2025.
The government took all measures to actualize this goal by overcoming law and order issues, defeating terrorism, and breaking bottlenecks of energy and infrastructure (through CPEC). As a result, think tanks like PWC started predicting that Pakistan can become a top 25 economy by 2025.
The minister said that Pakistan had two choices and stands at a critical juncture: either, It can again go through a stabilisation process and then again aspire for growth but will then be hit by circular debt/budget deficit and breaks will have to be applied “Or we can address structural issues of economy by focusing on exports to expand its overall base and by including value-added goods and services. As of now, the top publicly traded companies of Pakistan have negligible contribution towards exports, as current incentives do not push them to do so” he said.
Minister Iqbal said that its true that Pakistan needs to walk through a stabilisation process but that must be coupled with long-term industrial framework that realigns economic incentives in the country due to which Pakistan’s savings are not parked in real estate/gold/foreign currency but instead goes into making Pakistan a productive economy across all sectors. He said that in order to extend ownership of Pakistan’s reform agenda to people at large including academic/practitioners/civil society movers and shakers.