In the absence of any systemic or meticulous approach to tackling deep-seated woes, the overall economic outlook appears to be blurred or bleak. But the firefighting mode is helping to superficially ease pressures on the external sector, possibly for a brief spell, while curbing domestic demand of imported goods/services amidst sliding GDP growth.

However, the risk of foreign debt default is still a hot topic in the national discourse, with falling forex reserves and the dollar gaining value against the rupee.

Initiatives such as diversifying sources of raising domestic finances for investment in prioritised productive sectors and encouraging capital spending on the energy sector to eliminate foreign crutches will take a bit longer. However, these steps will not be enough for the turnaround of the economy and sustained and inclusive growth.

The central bank has decided to update its primary dealers’ system to create more capital market functionaries in the primary market of government securities. It says this will cater to the needs of a diverse group of investors and attract a new clientele to the government securities market.

A growing number of opinion builders continue to stress the need for charters of economy and democracy and enforcing these through a charter of governance

By allowing microfinance banks and specialised primary dealers to open Investor Portfolio Securities account services, more than 85 million branchless and mobile banking users will be enabled to take advantage of attractive returns offered by government securities.

Speaking at the Annual Excellence Awards ceremony organised recently by CFA Society Pakistan, State Bank of Pakistan Governor Jameel Ahmed said: “As financial conditions have tightened and capital flows are moving away from emerging markets, domestic markets need to fill the gap and facilitate mobilisation of domestic private capital to key priority areas such as infrastructure, corporate investment, small- and medium-sized industries and climate-focused projects.”

Another notable development is that representatives of the country’s textile industry, labour protection organisations, the Employers Association of Pakistan and other stakeholders have signed a Bangladesh-style international accord with a German company Kik to provide training and a safe environment to workers of industrial units.

This will help increase productivity and exports. Kik CEO Patrick Zah said the agreement would help make Pakistan’s textile and garment industry safe, socially responsible and strong. In view of a representative of the towel industry, the implementation of the accord would make it easier for domestic industries to comply with global norms and increase textile exports.

To reduce its import bill, Pakistan is negotiating with Russia to buy crude oil and petroleum products at a discounted rate. The government has also revived the exploration licences of 11 firms, earlier revoked, to boost indigenous oil and gas production. It has entered into deals with energy firms stipulating an investment of $56m in the first three years of their exploration activities in oil and gas areas.

And the Private Power and Infrastructure Board has urged the management of Port Qasim’s imported coal-fired 1320MW project to start preliminary testing with 10 per cent Thar Coal blending. Work on renewable solar is also being encouraged. President Arif Alvi has advised the nation to conserve water, energy and other natural resources and avoid waste.

Faced with an acute shortage of dollars and high inflation, anecdotal evidence suggests that the market is beginning to adjust to changing ground realities. For example, one can see a marked shift in investment from the greenback to gold.

Bloomberg reported that $6.5bn worth of gold (up by 34pc to 13 tonnes in quantity) was purchased mainly by investors in the first quarter of this fiscal year. The supplies came from the middle-income groups selling their jewellery to cope with the rising costs of living.

Despite October-February being marriage season in the country, the demand for jewellery has plunged by 90-95pc these days, says a leading jeweller. Most of the demand from investors is met by converting old jewellery into 10-tola gold bars. The quantity (though not value-wise) of gold imports dropped marginally by 1.92pc to 51kg during July-August as compared to the same two months of last year.

However, we are nowhere near improving the fundamentals of the economy. As an analyst with insight into economic issues says, ‘We urgently need an Emergency Economic Stabilisation programme with three components: external debt sustainability framework, fiscal stabilisation plan and structural reforms. There is no other way out, he says, and adds: ‘we have to bring back the International Monetary Fund.’

And a growing number of opinion builders continue to stress the need for evolving a charter of the economy, a charter of democracy and enforcing these effectively with a charter of governance.

Referring to political polarisation in the country, President Arif Alvi says that ‘politicians should talk and discuss all contentious matters’ to take the country out of crisis and polarisation. And pointing out that the army has publicly committed to staying out of politics, the president added, “it is now for the politicians to grab the opportunity with a sense opportunity.’”

To quote an opinion piece, “it is time for both sides (Pakistan Tehrik-i-Insaf and Pakistan Democratic Movement) to show flexibility and realise that the future of more than 240m people is at stake.”

And democracies worldwide have to reinvent themselves to become more responsive to the needs of their people and cooperate to find people-centric solutions, said Foreign Minister Bilawal Bhutto while addressing the recent ‘Democratic Forum’s conference in Bali, Indonesia.

Published in Dawn, The Business and Finance Weekly, December 19th, 2022