Pakistan’s Economic performance : Myth and Reality

(Dr.Mehboob Syed, Karachi)

Dr.Syed Mehboob
Pakistan Economy was fragile before Covid 19 and it received worst effects after Covid 19 which inflicted a loss of 3,000 billion or about 3 % of GDP. Pakistan’s economic fruits and benefits are not transferred to down trodden since decades and it is in clutches of Sugar, Wheat, Flour and Power mafia who has always lion’s share in government, authorities and economy. The mafias always enjoy the perks of power whether it is government of military dictators or so called democracy. The successive governments were failed to take any action against them and situation is still remained same. How powerful and influential these groups are it can be imagined from these facts thatthe total tax exemptions and concessions to various businesses sectors, lobbies, groups, investors and Chinese imports have cost the national exchequer Rs. 1,149.95 billion during the fiscal year 2019-20 against Rs. 972.4 billion in 2018-19 reflecting an increase of 177.55 billion . At the other hand government has reduced subsidies on electricity and people are receiving inflated bills amid COVID 19 and no relief has been provided to masses. The government’s economic team and minister painted a rosy picture to the nation with Foreign Direct Investment growth of 1268 % , credit rating profile improvement, fiscal performance remained strong, reduction in policy rate which was 13.25 % cut 5.5 % and brought to 8 percent. Government also has communicated good news for people that it successfully got IMF’s 39 month Extended Fund Facility (EFF) arrangement programme in July 2019. The government’s economic managers who actually are the part of IMF team as government’s own economic team led by Asad Umer was replaced by Dr. Hafeez Sheikh who is adviser to Prime Minister on economy and Dr. Baqar Raza who was serving at IMF is now governor of State Bank of Pakistan. So, much credit if some improvement could be seen to these non- elected persons who do not represent people. Although World Bank’s ease of doing business index shows improved in Pakistani ranking and stable credit looks to B3 from negative by Moody’s are positive signs but when the same institutions rating and indexing was quoted by previous government, it was mocked by PTI and considered it unreliable as similar to Gallop survey poll results. Now these reports are proudly presented by government’s lobbies.

Economic problems remained same since decade like low tax to GDP, minimal export growth with negligible value addition, lack of Pakistani international branding, and as whispered by present government itself the pace of economic slow- down, rising inflation (which eased after COVID 19 record decline in oil prices and not due to government policies) because before COVID 19 the inflation was at its peak. Government still believes in rhetoric, tall claims and unrealistic targets. Five million homes in remaining three years because two years had already been passed without any progress in this target similar to BRT Peshawar and now in remaining three years government has to make 1.66 million houses per year , monthly 138,333 monthly , 4630 daily and 193 home in a hour which seems impossible. Similarly the case is with 10 billion trees which in remaining three years government would need to plant 333.33 million trees per year, monthly 2.77 million , daily 92,592 daily , 3,858 per hour 64 plants per minute and 1 plant per second. One can imagine what sort of day dreaming is shown to the nation.

Another short coming is that the economic managers and government not yet taken Covid 19 seriously and assumed that the country would be cleared till the last quarter of the year which is not case and till 15th June in just one month death percentage increased 242 percent and Asad Umer warned that till next month of July cases might rise to 1.2 million. As on 15th June 2020 there are 142,263 positive cases and 2,663 death while 51,738 patients recovered. Recovery percentage against cases is 36 % which is not very much encouraging. It seems that the remaining part of year 2020 will continue to receive negative impact of Covid 19 on economy as in China the virus reverted and world would remain in risk until vaccine has not been supplied in the market which does not seem possible in 2020. Another thing which needed to be noted is that PTI government’s both years proved disastrous for large scale manufacturing witnessed decline in growth.
Large Scale manufacturing Growth
Year Growth %
2012-13 4.2
2013-14 5.4
2014-15 3.00
2015-16 2.8
2016-17 5.2
2017-18 5.6
2018-19 -2.2
2019-20 -8.00

Only Agriculture sector witnessed positive growth of 2.67 % while Indusrty growth was -2.64 % and services sector which is the largest contributor to the economy witnessed -0.59 % growth. Both Industry and services account 81.26 % of economy which shows the dismal position of the economy. The current economic policies are simlar to those in past and far from economic system of Riyast e madina and the guide lines provided by founder of Pakistan Quaid e Azam Muhammad Ali Jinnah. Quaid E Azam in his address in Chitagang public gathering said,” You are only voicing my sentiments and the sentiments of millions of Muslims when you say that Pakistan should be based on sure foundation of social justice and Islamic socialism, which emphasize equality and brotherhood of men. Similarly you are voicing my thoughts in asking and in aspiring for equal opportunities for all. These targets of progress are not controversial in Pakistan , for we demanded for Pakista,. we struggled for it and we achieved so that physically as well as spiritually we are free to conduct our affairs according to our traditions and genius. Brotherhood, equality and fraternity of men these are all the basic points of our religion, culture and civilization”. This gives clear indicatioj that survival of Pakistan only could be on the basis of equality , brotherhood and on Islamic economic system. Interst based economy and Riyasate Madina could not be run simultaneously. We have to move towards interst free based Islamic economic system. The government was forced to pay Himalayan interest of Rs. 5,000 billion in two years wich is equal to Rs.2,500 billiob per year Rs. 208.33 billion per month Rs. 6.944 billion per day, Rs. 28.93 million per hour and Rs.4.82 million per minute.

COVID 19 provided us a chance that merely on the basis of wealth we can not survive at any time this wealth could be wiped out by epidemic like corona virus. Therefore these is a need for to increse Sdqat and to pay Zakat by every Sahib e Nisab and wealth shoukld be shared with have nots. Other wise Corovis has revert in China and not prediction could be given for how nuch period it would be continued. Therefore it is needed that all policies should made on the basis of relity and to stop the showing rosy picture and misleading to the nation.

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