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Is Pakistan really making 'great economic strides'?

Updated May 19, 2014
- Creative Commons
- Creative Commons

With the PML-N led government promising further drops in inflation, foreign exchange reserves crossing $15 billion in July and friendly neighbours lending a helping hand, there is no shortage of articles cropping up on the great economic strides being made by Pakistan.

The real question however, is if any of these economic successes will trickle down to the general public.

From a person who has been moderately successful at entrepreneurship, the first thing I have noticed, is that indeed in the transition period, the wheels of trade were turning quite smoothly and it seemed as if things were getting better.

Hotels being full and deals being struck were among the first signs of a galvanization of economy; these deals would be a key source of employment and improve living standards for the public. Add to this the fact that it seemed like this government had some sort of a plan to handle our debt crisis, and almost every one I met seemed hopeful.

Since then though, a year has passed and I think now is a time when we need to stop giving the new government a chance and ask some questions.

1) Foreign exchange crossing 10 billion dollars

Saudi arabia’s magnanimity aside, nobody gives 1.5 billion dollars as a gift to any country without expecting something in return.

There will be costs associated with this 'gift', ranging from something we seem to not give a toss about (some sheikh's kid killing 1,000 Houbara Bustards in our interior) to those with serious consequences e.g. our army on call to serve our Arab brethren when they feel threatened.

Economic success from this gift cannot trickle down to the poor unless the government uses it to say, subsidize food staples and ensure their supply. That would make a huge difference - but will it happen?

2) 3,500 megawatts electricity plants in the next three years

This aim by the government is laudable, and yes there are no magical wand waving solutions to a burgeoning and looming power collapse, which is imminent given how our population grows and consumes.

However, if Pakistan is to grow economically right now, we need to provide our industries with power. Three years may be too late for us. We need a solution now, and even if that means running a power line from India or China to our grid and buying their excess electricity “so be it”.

Also, it is quite sad to see that companies which generate and control power in our country get to raise tariffs without any consultation with trade bodies or chambers of industry. The current electricity tariffs are expected to go up yet again in the upcoming budget. Rising costs of inputs lead to the crippling of economic activity.

We also need to quantify and enforce load control measures. Every house in major cities in Pakistan in the affluent neighborhoods has 4-8 air conditioners. Should they be allowed to suck up loads without check?

3) Great development taking place in Pakistan

It is, but where is it taking place? If we take Punjab as the model for this development it will score top notch points across the board. However, what of the other provinces? How much development is taking place in Baluchistan? Khyber-Pakhtunkhwa? Sindh? We need to examine this first before we make claims of great economic development.

The power base of PML-N is Punjab and they have always worked effectively there, but we cannot ignore the other provinces and hope to stride forth as a nation together. For trade to flourish in areas that are currently bereft of economic activity, proper infrastructure is needed much more then over passes in Lahore or Karachi.

In South Sudan, USAID helped build a 192-kilometer-long Juba-Nimule Road, the largest infrastructure project ever built in South Sudan. It connected Juba to Uganda and generated economic opportunities for the South Sudanese along the whole route.

If we only uplifted the roads across our provinces, connecting them properly, we would take strides.

Having said that, I myself have heard Mariam Nawaz say "my father is not the prime minister of Punjab but of Pakistan", so progressive thought does exist at the power center today. However, unless that progressive thought translates into actual policy that enables productivity, we are not going anywhere for a long, long time.

For starters as our Chinese friends are talking about a $32 billion investment package; the government needs to make sure that this investment goes to all basic areas of need for economic activity.

The money must be used to enable projects to employ all of Pakistan, leading to the economic boost we need. It cannot be said enough: we need stable power, better roads and some incentives.

If the government can provide just the basics to our business community, there will be no stopping Pakistan. That much I can guarantee.