As they say, “Either shape up or ship out”. Pakistan chose the first option i.e shape up. While much of the world is struggling to minimize the economic damage caused by the Corona Virus Pandemic, Pakistan’s economic recovery seems to be hitting the stride. Since the government of Prime Minister Imran Khan took over, in the past two years the most critique was on the dooming economy of the country. The irony is that this criticism was from the same opposition which transmitted the largest economic crisis of the history. When the present government took over, in 2018 the net reserves of Pakistan were 7.285b USD, the lowest in the history. In 2015, the net reserves were 18.1bUSD, which fell to 16.1b USD in 2016, further dropping to 9.7b USD in 2017 and then the 7.2b figure in 2018 after which Pakistan could be defaulted.
Pakistan was caught in a fatal debt trap, which had put every Pakistani under a debt burden. In the year 2013, the inflation rate of Pakistan escalated from 5.1% to 10.9%. The situation was so worse that according to Fitch ratings, Pakistan ranked negative from stable. The interest payments were Rs 991bn in 2013 and in 2018, the interest payments rose to Rs 1500bn, an increase of 51%. These catastrophic policies had destroyed the economic condition of the country once. Such criticisms are common in every regime and so are the problems of the common man.
Despite inflation which the government is trying to handle and genuine public sentiments, the once dooming economy of Pakistan is now recovering. Pakistan is on a stable position.
The reserves that were 7.2b USD in 2018 are now above 13b USD apart from the reserves held with the commercial banks. As per the report released by the AHL (Arif Habib Limited), it is expected that the economy of Pakistan will bounce back in 2021. The world has started recognizing that Pakistan’s economy has started to shape up.
The positive news is that the World Bank’s latest report explains that Pakistan has become a new entrant, with the fourth highest commitments in terms of investment, leaving behind the enemy state India, which lies on the 5th spot. This is happening because Pakistan is becoming an attraction for investors. The large markets of the world are planning to invest in the county, especially in the energy sector. Pakistan’s economy is now witnessing an upward trend unlike past, the fruits of which will soon reach the common man. In the fiscal year 20/21, the collection of tax grew by 4.5%, the remittances expanded by 26.5%, FDI (Foreign Direct investment) elevated to 9.1% and a surplus current account for consecutive 4 months, a total of 1.2b$.
As per the state bank, the liquid foreign reserves held by Pakistan have elevated to $20b. These economic indicators prove that Pakistan is moving in the right direction in terms of economy. The smart lock down policy by the government in the first wave of Corona, not completely but partially aided the economic damage control. The government’s interest to keep the economy boosting can be witnessed by its interest in the CPEC Projects including Roads, Railways, airports, renewable energy projects and SEZs (Special economic zones). These investments in infrastructure will develop job markets, further strengthening economy. PM’s self interest in economy is also evident from his steps for textile industry in Faisalabad. All these efforts to revive Pakistan’s economy are a positive step for the country, which must be applauded at all levels.
The inflation and the public concerns, especially during the Pandemic, on the ground level exist. The harsh reality is that the common man is less concerned about the stats and ranks the country lies on but more about the rates of common household products including food and medicine. The only hope that lies is that these positive economic indicators soon become a relief for a common man.
The writer is a freelance journalist