- By: Saif Ur Rehman
Since Quaid e Azam laid the foundation stone of Pakistan, the prosperity of the country has been a pipe dream. The crippling economy is to be blamed for the current tarnished image of the country. A number of hosting factors can be held incumbent for ensuing the aforementioned glitch with political instability being the prominent one. Phenomenally, the polarization in power sectors over the course of the years flamed unstable political structures which ultimately forged faltering economy. Of late, a report by IMF aligns with the very fact that Pakistan is to tackle 0.2% decline in GDP of the fiscal year 2025 following ongoing political confrontations. These dismal stats speak volumes about the proactive role of political instability in fostering a sobering portrait of economy.
Not only political polarization but short term financial strategies and over reliance on bail out programs also bring about economic turmoil. It is a mindful fact that country’s financial solidity cannot be realized on the backs of bail out programs. A hefty portion of the state revenue is spent in due tranches of the funds perpetuating vicious cycle.
Similarly, Pakistan is stringently mired in economic doldrums due to in efficient planning. Sadly, stakeholders hardly accentuate on long term strategies. In lieu of that short term financial approaches are more focused causing leverages for a short term and pecuniary gaps are generated again. Having said that the short term oriented goals come with several vulnerabilities among which excessive debt can be rightly placed on top of the list.
Furthermore, undermined agricultural sector and disregarded natural resources yet stand as driving factors on the backdrop of fragile economy. Not to mention the fact that preceding elements put up almost 35% to Pakistan’s GDP, yet their marginalization tells a sorry tale. Unbridled taxation on agricultural products along with flinching yield’s rates forecast economic haphazard. In the near past, a report by finance division divulged that agrarian trade deficit solely stood at approximately 24.09 billion dollars in the fiscal year 2023-24. Such alarming figures underscore the catastrophic strain being placed on countries Foreign Exchange Reserves and economic integrity.
All things considered, to shun up this path to scaled catastrophe Pakistan needs to revitalize its economic infrastructure. Conforming Pakistan’s current economic woes, Foreign Direct investment (FDI) led growth model can be best cited in this domain.
Increased foreign direct investment by means of attracting Multi – national Companies (MNCs) is one of the lucrative economic models acknowledge globally. The blueprints of the stated model on economic case studies of India Brazil and exclusively ASEAN speak volume about its efficacy. Interestingly, the preceding countries aligned their financial policies with economic globalization, are currently well- heeled economic houses. Having said that the feasibility of this model entails some imperative provisions with political stability , conducive environment and commercial visibility being the pivotal ones. Consequently, augmented Human Capital by the introduction of MNCs will alleviate poverty ratio.
In a like fashion , government should centralize its approach around Export Led growth model by demonstrating export oriented Industries. Again, the viability of this model largely relies upon infrastructure development to reduce costs, exports diversification, lowering tariffs and investment friendly businesses. Additionally, a stable exchange rate could be a catalyst in boosting investor confidence and trade. If things are put right in place the country’s GDP growth is likely to surge y 6-8% annually in the long run. A case study of China could be best cited in this approach manifesting 4-10 % increase in its GDP by opting the very said model back in 1978 – 2000.
In a best case scenario, those who are holding the sway must share the table for the sake of national integrity negating vested manifestos. It is harsh fact but must be said that treading along the following path will entail congregational inputs. And no sooner will Pakistan embody the very version that Quaid e Azam dreamt of decades ago.