According to Economic Survey of Pakistan, the total GDP of Pakistan was Rs 43.2 trillion and an economic growth rate of minus 0.4 percent. Then in March 2020, the economy was struck by the COVID-19 pandemic. The first wave started a panic among the population as well as the policymakers and the government resorted to a partial lockdown of the economy. The State Bank of Pakistan envisaged its GDP growth rate at 2.1 percent, the IMF forecast an economic growth rate of 1.5 percent, while the World Bank forecast a growth rate of 1.3 percent. In the first half of 2020-2021, the economic growth rate of the country was 1.0 percent, which means that recovering from minus 0.4 percent to 1.0 percent was an achievement. This would mean that by the end of 2020 the economy grew by 0.6 percent in net terms.
The end of 2020 and beginning of 2021 brought in the second wave of COVID-19 to Pakistan and the economy was again devastated by smart lockdown, but by this time the federal government, the State Bank of Pakistan and the provincial governments in the country had initiated both economic as well as health incentives that made the construction and allied industries to resume and the textile industry to increase its exports. By May 2021, the third wave of COVID-19 had struck the country. This year the government made a complete lockdown of all economic and travel activities for 10- day holiday season. Although this measure brought down the number of active COVID-19 patients in Pakistan but for the economy it was a devastating measure and instead of the GDP to have grown in the festive season buying, it actually shrunk. The lockdown caused a loss that Pakistan’s fragile economy cannot sustain. Most of this loss would have been in the services sector as most of the economic activity in the retail business, restaurants, marriage halls, educational institutes, transport etc was closed down. Now the count down to the next budget 2021-2022 has started and only one and half months is left to the end of this fiscal year. Can the construction sector and the textile sector sustain the help the economy to grow at 2.1 per cent in these 45 days when even Finance Minister Shaukat Tareen has said that the country needs an economic growth rate of 5.0 percent to save itself firm economic crisis in the next four years.”
It should be noted that the growth rate to increase during these difficult times needs an overall restructuring of the economy and the institutional framework of Pakistan. I do not believe that the present economic structures can sustain the country’s economic growth above 2.5 percent even without COVID-19. The country needs serious overall of its structures, mechanisms, laws and socio-economic attitudes which is a large and difficult task on the plate of a government combating corruption from all types of political and economic cartels (mafia) during these past years of its rule, without substantial results. For a long-term policy measure, there has to be a restructuring of the four factors of production (basic factors to economic growth and enhanced standard of living for any country).
The government through a holistic policy approach should ensure that the private sector should take measures. A large part of the new products in light engineering, chemical and heavy engineering as well as consumer goods (having comparative advantage for Pakistan) should be products that create greater value addition than the existing industrial products, when the world share of textiles is shrinking. Produce capital goods at the cost of investing into consumer goods through international cooperation for technology transfers and modern, cost-effective, energy-efficient machines and tools (robotics and artificial intelligence) that would greatly enhance productivity and growth of the industry in the country. Give a comprehensively new education system to its future generation through enhanced 21st-century scientific knowledge, communication skills and technical skills for all its children so that a new kind of human resource can be produced that can cater for the new needs of the future socio-economic world that is being built due to technological changes and due to COVID-19 in the world.
Pakistan houses a diverse and unique flora and fauna that can be transformed into value addition and exportable natural resource, whether through mineral production, farming or animal husbandry of many different kinds that can be exploited efficiently for exportable purposes. It is also important that the country, produces an efficient and skilled labour force equipped with modern techniques and know-how, but it is important to produce a new era of entrepreneurs and SMEs that can be linked directly to the international markets. It is also important to produce more efficient managers of all types (human resource) with knowledge of how to mix the capital-labour ratio with new out of the box techniques and technology for greater efficiency in the production sector that also caters for the challenges of climate change and environment protection, equipped with the vision of sustainable development goals. The government itself should also restructure itself into a viable political entity, void of economic inefficiencies but aware of the socio-economic needs of our future generations that are 60 percent of the population. It should be noted that the government should concentrate on the education of the children for the future, health and productivity of the present generation and social safety of the past (old) generation along with catering for employment of the daily wagers in the water, construction and power sector of Pakistan so that when the private sector is concentrating on growth through technology, the public sector helps labour get primary employment.
All inefficient public institutions and organisations that are a burden on the budget should be scrapped or privatised. These are a few recommendations for the future economic growth of the country, if implemented then long-term advantages can be reaped through changes in institutions, changes in education and health, changes in international linkages and changes in the private and public sector of Pakistan. The punch line is that Pakistan cannot go into the 21st century socio-economic growth model with 18th and 19th-century institutions, socio-economic behaviours and laws.