Pakistan Tehreek-i-Insaf Chairman Imran Khan considers bad governance, centralisation of power and misplaced economic priorities responsible for the country’s ‘economic meltdown’.
However, his party, which hopes to enter the parliament with a big bang in the next elections, does not consider militancy a central issue for the economy.
According to the party, in 2007, the year that saw innumerable terrorist attacks in cities and the bloody operation of Red Mosque in Islamabad, Pakistan received record foreign direct investment.
“The investment yields in Pakistan are very attractive, and if the government’s credibility can be improved, the capital will again start flowing in, with or without troubles in the country’s north “, Asad Umer, Vice President PTI, said at a press conference in Karachi, while responding to a question. The press conference was called to elaborate on the PTI’s economic policy framework.
“The armed attacks in major cities have declined significantly since 2007 but so has investment” he added, attributing the low investment trend to the collapse of governance.
If voted to power in upcoming elections, the PTI leadership hopes to steer the economy out of difficult corner by implementing the party manifesto. It advocates inclusive growth and promises to achieve an average annual GDP growth rate of six per cent.
To this end, the PTI projects to address energy deficit on war footing, push up resource mobilisation to three trillion rupees through tax reforms while axing wasteful public expenditure, transforming state sector enterprises, reforming state apparatus through devolution down to village level. Investment will be scaled up to ultimately universalise health and education.
Pakistan is trapped in low growth trajectory for the last five years posting under three per cent average annual growth rate. In the same period, investment has dropped from 22 per cent to 12.5 per cent of GDP last year, according to the official data.
The party intends to present a detailed strategy for each area covered by its programme over the next few weeks.
The PTI’s vision on growth and employment envisages industrial growth of nine per cent per annum. Its industry policy is focused on (a)small and medium enterprises with performance based incentives; (b) promotion of high-end industrial zones (c) Islamic finance (d) investment by overseas Pakistanis. Trade diversification and increased emphasis on regional economic co-operation also feature in the programme.
Businessmen did not generally take the PTI presentation seriously as they are not inclined to look beyond their immediate concerns. The corporate executives did not share the party’s enthusiasm but were generally supportive also because of they saw Engro’s ex-CEO as their man in the PTI. Analysts and experts of political economy were critical. Kamran Mirza, CEO Pakistan Business Council, was all praise. “They actually incorporated many features of our document ‘Pakistan Business Agenda’ in their programme. I find it quite comprehensive.”
Humayun Bashir, President Overseas Chamber of Commerce and Industry, told Dawn that he intended to engage all political parties on their economic programmes. “We will share our surveys of business perception with them to persuade them to make their programmes business-friendly. We can no longer afford to sit on the fence. I find the PTI to be a good addition to our political spectrum.”
A senior banker criticised the PTI programme for ignoring the financial sector altogether.
“The financial sector is key to development. It is time we introduce new tools in financial and capital markets to spur investment activity”.
“Generally speaking, it is good but for me it is far from comprehensive. The document does not mention macroeconomic stability which again is intriguing”.
“Again there is nothing on documentation without which all hopes of roping in under-taxed sectors will dash”.
“Yes, progress in social infrastructure is important but I cannot imagine business-friendly environment in absence of necessary investment in physical infrastructure. You can simply not dismiss development of roads and bridges because you want schools and hospitals. They are two sides of the same coin”, he concluded.
“More than policy, I believe, the rulers’ will to implement their action plan is crucial. Look at India, they have strong independent Planning Commission that closely monitors implementation of approved policies. Our Planning Commission is more of a debating club. We have no dearth of policies but they live and die in files.”
When approached, Dr Hafiz Pasha said he had advised the PTI on tax reforms and identified ten measures that could help in bridging internal resource gap. “Of those ten steps, two/three were accommodated. An important suggestion the party ignored was the concept of introducing ‘minimum asset tax’. Besides the need to revise the rate of agriculture income tax has also been ignored.”
Some economists who participated in preparatory meeting of PTI Manifesto in Lahore expressed their disappointment with it.
“They are a bunch of politically ambitious people with little understanding of the economy and the society. They declined to include land reforms in their programme.” I am not ready to take them seriously.”