ECONOMIC REFORMS IN PAKISTAN 2023
Pakistan is a country that has abundant mineral and rich natural reserves. Agriculture is its dependence which accounts for 19 of its GDP and together with agro-based products, fetches 80% of its countrys total exports. Agriculture-grounded products regard for around three fourth of countrys total export of which about 60% share is delivered by Punjab. Labor force more than 42.1% is engaged in this sector. The husbandry sector considerably contributes to the economy and employs a significant portion of the population. The mineral sector is still lagging far behind despite having huge reserves as compared to the worlds market. As compared to the worlds mineral export market of 3612 billion USD, the exports of Pakistan are slightly small, with a value of 1.17 billion USD during the previous year. Pakistan is endowed with significant mineral reserves. Pakistan is facing multidimensional contingency including profitable extremity and easily requires external support. Our economy is teetering on collapse due to a possible extremity, the rupee
sinking, devastating floods, and a significant deficit if energy. Foreign exchange reserves are at a dangerously reduced level. Enough to pay for only a few weeks worth of imports. Inflation is at highest level of history, growth is dropping down and central bank has raised interest rates abruptly to address weak currency on immediate basis. Pakistan total Exports reached $ 2.1 billion in February 2023. In contrast, its total Imports were $ 4.9 billion the same month, showing trade balance deficit $ 2.6 billion. The deficit was $2.8 billion in the former month. According to the Import Policy Order 2022, Pakistan imported 959 non-essential items of 100 different categories. This shows huge consumption of money which can be saved by making local substitutes of nonessential items with supports like incentives and tax breaks. It will as a result create much needed jobs. Below listed are some of the propositions pen down by the business elites of our worthy platform CEO CLUBS WORLDWIDE for the ruling governance to regard for the incremental growth and to overcome this unavoidable emergency in Pakistan.
◆ Transparency should be guaranteed.
◆ The process regarding the accountability has to be ensured.
◆ It is important to ensure that natural resources should be utilized in a sustainable manner to ensure their availability for future generations.
◆ Develop E-Pakistan, encouraging digitalization and E-commerce, diversifying economy, improving vocational training, strengthening disaster preparedness and providing security.
◆ Consistent policies need to be essential to maintain a stable business environment and encourage investment.
◆ The government has to broaden up the tax base to be able to increase the budget for education, health, creation of the wealth and startups.
◆ It is proposed that the first 100 best exporters be given status of Ambassador, as they will be at the forefront of driving growth in their respective industries.
◆ Business and industry needs to be independent of government and establishment changes, corporate governance is absolutely essential for economic growth.
◆ Pakistan needs to attract foreign investment and promote domestic investment. The government should offer incentives, tax breaks, and other financial benefits to investors to encourage them to invest in the country.
◆ Pakistan heavily relies on textile exports, which make up about 60% of its exports. Diversifying exports to other industries such as IT, pharmaceuticals, and food processing can help to reduce our countrys reliance on a single industry.
◆ The social society, educated class and media should exert maximum influence and pressure on the government to provide a level playing field to Pakistanis and cease the tradition and system of providing favorable benefits to the influential league.
◆ The present policy regarding the small and medium enterprises has not been effective. There fore, a practical and operational intervention is needed to transform our industrial sector and increase exports.
◆ Improving our infrastructure can help to attract foreign investment and promote economic growth. The government can invest in roads, ports, airports, and frameworks to improve connectivity and logistics.
◆ Upgrading learning and skills development can help to increase the quality of the workforce and attract foreign investment. The government can invest in education and vocational training programs to improve the skills of the workforce.
◆ Promising innovation and entrepreneurship can help to create new businesses and industries, creating jobs and driving economic growth. The government can offer financial and non-financial support to entrepreneurs and create an environment that promotes innovation.
◆ The government needs to maintain fiscal discipline by keeping its budget deficits under control and reducing its liabilities. This can be achieved by implementing policies that promote sustainable growth and reducing extravagant spending.
◆ Combating terrorism is necessary to restore stability and build confidence among investors. It demands strengthening national security, enhancing intellectual capabilities, and promoting cooperation with regional and international partners.
◆ No sustainable economic growth is possible without the political stability in the country. Political stability cant be achieved with diverse divisions in the social strata of a society, mat it be religious, sectarian, regional, ethnic or else. For that, the consensus can only be earned through the efforts of thought leaders, intellectuals, or the mission drivers.
◆ It has been identified the need for a stronger private, public and academia partnership to drive steady growth in the development sector. It is considered with the right resources and support; we can create a stable environment for both sectors to thrive.
◆ Supporting farmers through subsidies, and quality seeds and fertilizers to handle problems like food security challenges due to population explosion, increasing loss of green acres for rapid urbanization, inflation that is squeezing purchasing power, irrigation inefficiency, climate change, depleting water reserves.
◆ Boosting domestic productivity through implementing policies that promote entrepreneurship and innovation, such as reducing bureaucratic red tape, investing in infrastructure, and promoting education and human capital.
◆ Building up foreign reserves is necessary to maintain macroeconomic stability and prevent a balance of remittance emergency. This can be achieved through measures such as promoting exports, attracting foreign investment, and implementing policies that promote macroeconomic stability, such as inflation attack.
◆ Corruption is a major problem in Pakistan as it discourages foreign investment. The government should take serious practical measures to reduce corruption, for instance increasing transparency and accountability in administration practices. This can be achieved through measures such as implementing anti-corruption laws, strengthening regulatory agencies, and promoting transparency and accountability in administration.
◆ Comprehensively, addressing Pakistans economic challenges will demand political will and a coordinated effort across various government agencies, the private sector, and civil society. Implementing these solutions will require sustained commitment and investment in longer run, but they offer a pathway to a stable, prosperous, and secure future for Pakistan.
◆ The present political turmoil has to end with immediate effect. There is a deep sense of mistrust, loss of direction and hopelessness among entire segments. Public is developing a feeling of resentment against institutions because the ongoing IMF negotiations have opened up so many well kept secrets on administration.
◆ Despite these positive developments, the IT sector in Pakistan still faces some challenges, including the lack of funding for start-ups and small businesses, limited access to international markets, and a shortage of skilled professionals in certain areas. Nevertheless, with the governments support and a growing number of IT companies operating in the country, the IT sector in Pakistan is expected to continue to grow and become an increasingly important part of the countrys economy in preceeding years.
◆ One more potential sector of Pakistan is its sea which it did not utilize properly. The country has 1,200 kilometers long coastline with the Arabian Sea – a mid-sea which joins the strategic oil line of the Persian Gulf with the Indian Ocean. This coastline can provide significant economic benefits to the country through modernizing fishing, exporting the catch, proper utilization of ports for trade and development of beaches to promote local and foreign tourism. The coastline of gas and oil reserves are awaiting to be explored and generate money.
Unfortunately, Pakistans current FDI policies are not facilitating investors. It can attract foreign investment by simplifying procedures and
processes for obtaining permits, licenses, and other regulatory approvals, so as to reduce bureaucratic hurdles, providing incentives such as tax holidays, reduced tax rates, and investment subsidies, investing in the development of infrastructure such as roads, ports, and power supply systems. streamlining regulatory framework, ensuring security for foreign investors by providing a stable political environment, improving law enforcement, and addressing issues related to terrorism and extremism., developing human capital, and promoting public-private partnerships in areas such as infrastructure development. This can create opportunities for investors and can help achieve sustainable economic growth.
Consequently, IMF finances will help Pakistan to avoid dereliction on its transnational scores, which could have seismic consequences for its frugality and its people. Replenishing foreign reserves is pivotal in this regard. Foreign assistance programs will also help to address the disaster relief areas, but this will be much more manageable if Pakistans reserves rise to situations that inseminate confidence in its capability to pay its debts. Following these practices may lead us to an upgraded economic system and a better country to live in.