LAHORE – Often put question to me is: how do you see the year 2012 in economic terms? And I always quote the proverb “as you sow, so shall you reap.” This six word adage to me is the most suited maxim when it comes to economy.
Yes, I have reasons as well. An acute shortage of ,electricity and gas, high markup rates, weak institutional framework, ever increasing budget deficit, low productions and tax-to-GDP ratio, highest-ever bank borrowings, corruption, fast going up rate of unemployment, worst law and order situation and political instability have made us the most economically and socially challenged country
All the Public Sector Enterprises (PSEs) including; PIA, Pakistan Railways, Pakistan Steel Mills and PEPCO have their own sorry tales and are causing a loss of more than Rs 400 billion annually to the national exchequer.
All these problems are not only choric but complex in nature and apparently a long time is required to clear this mess-like situation.’ But to me the country only needs a group of selfless, honest and sincere people to put the house in order.
Electricity shortage could have been a story of the past if a little attention was given towards the construction of water reservoirs in the country but unfortunately we, as a nation, are used to mix politics to even the very simple issues.
Our coal reserves are the fifth largest in the world, their value in the international market is about three trillion dollars but in the last four years of the present regime no visible breakthrough came to the limelight. At a time when bordering India is producing 60 per cent of its electricity through coal, means and same amount in being generated in China, Pakistan is sitting on its huge coal reserves and making no use of them.
Kalabagh Dam is a classic example. It has been polticised to the extent and the government is afraid of even touching this issue. Had Kalabagh Dam been in place, the people would have been getting electricity at the rate Rs 2 per unit instead of at the rate we are getting today. Due to heavy reliance on thermal power, it is not only the country’s oil bill that has gone up manifold but the trade deficit is also fast widening and eating up precious foreign exchange.
Over the gas issue, my vote goes to availing all the available options including Pakistan-Iran gas Pipeline. Iranian authorities have done their part of duty. They have completed pipeline to Pakistan’s border and waiting for a nod to supply gas to Pakistan. The government should also expedite work on establishment of LNG terminals besides importing LPG from Gulf States.
High markup rate and banking spread, highest in the region, are also coming in the way of expansion of economic activities in the country and keeping the foreign investors at a distance as when the business community talks of lowering mark up rate, it actually wants an encouragement to the local investments that motivate foreign investments.
This makes the point that all the institutions should wake, to the economic meltdown and play their role for putting the economy back on rails. If the FBR would continue to act as money making machine, State Bank of Pakistan would stick to keep the markup at a higher level and the gas and electricity would the most sought out things, nothing good is possible on the economic front. And talking of an economic turnaround would be day dreaming.
Some well tailored steps are also needed to weed out the menace of corruption from the all the institutions and a team comprising people from all walks of life should be assigned the task to watch over the performance of the national institutions.
Political instability is another area where the politicians should focus on. This uncertainty has really pushed the country to the wall. All the political parties should sit together to look into the situation that has now started taking its toll. There was a time when Pakistan exports were more than the collective exports of a number of far eastern countries including South Korea, Philippines and Malaysia and today each of these countries has more than Pakistan total exports. In 60’s Korea adopted Pakistan economic model and toady the country is one of the fastest growing economies of the world while we are going the other way round.
Political systems with vision for future can play major role in economic stability of country. Japan is a formidable example in this regard. Even though the Prime Ministers change in Japan very frequently but the economic policies remain unchanged. In Pakistan political parties rarely have experts to comment on economic and financial affairs.
Therefore, when economic issues arise from time to time instead of making productive comments the issue gets politicized. It is recommended that all national political parties should have a think tank that should comprise of social, economic and financial experts. This think tank should cover finance, planning, energy, industries, trade, agriculture, dairy. and livestock, information technology, communication, commerce, resource mobilization, education and health. These experts should work in order to make constructive inputs for all national and international economic issues.
Once the economic consensus is built amongst the political parties in the government, no single party should be allowed to change the economic policies for the next ten to twenty years. Any minor changes or follow-ups to economic issues should be taken only while keeping the political parties in confidence.