THERE exists overwhelming empirical evidence across countries and across time that political instability is negatively related with economic growth and performance. Political instability lowers private investment, slows economic growth, and gives rise to unemployment and poverty. It breeds corruption, mis-governance, shortens policy-makers’ horizon, inconsistency in policies, and creates volatility.
Pakistan is witnessing a prolonged period of political instability and as such its adverse consequences for the economy are quite visible. The present government has also failed economically and continues to lurch from one crisis to another.
The government is clueless in addressing socio-economic problems in general and external shocks in particular. For a protracted period there were no finance, commerce, petroleum and natural resources and health ministers.
It is strange that the current government, having an absolute majority in parliament, failed to give political stability to the country. People within and outside the country had a lot of expectations.
The inept handling of events over the past year, have contributed to political instability. The current state of the economy is the mirror image.
The investment rate is decelerating, economic growth is slowing, unemployment rising and millions of more Pakistanis are slipping below the poverty line.
All political parties must sign a Charter of Economy before the next election. They must agree on certain economic policies and reform agenda for the better future of Pakistanis as no political party alone can undertake these reforms.
Published in Dawn October 22nd, 2016