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Pakistan is at a Verge of Collapsing Its Macroeconomics

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Suppose being a foreign journalist to whom this land and its happenings are absolutely alien. “A tragedy occurs and flames a public outcry. The rulers, the ministers condole; media mourns; students protest. Tears are shed. Over a week, all settles down. I am told about another loss; another misery—it’s so cliched that I don’t heed. I am told a second time. Now my ears bleed. My eyes mourn. ” This is what you would receive upon interviewing a grieving mother who loses her son in yet another terrorist attack in the country. Imagine asking what an orphan child thinks of the land where he lives, you might get a response like this: “This graveyard is not my land. ” While it might not be the best thing to foresee the next 30 years amongst the hard-hitting problems but it’s the only way to reinstall the country on to the right track.

Terrorism tops our all other problems. In alone terrorism, Pakistan has lost money worth $68 billion (estimates for the last decade). That explains as to why the economic growth of the country backslides as soon as there is some improvement. Because every time, we are heading towards something big, terrorism creeps in. Drowning all our aspirations in Blood. Despite the malicious intentions and devious plots of the foes, we have stayed for over 70 years. No doubt, it’s a feat on our part. But for the last decades, we were immersed in a cocktail of flawed leadership, corruption, failing judicial system, inflation, rapes, killings and whatnot, it is rather difficult to say if we did really thrive. Although the new government has made us hopeful of significant improvements, the government has inherited a bigger challenge of stabilising a crippling economy amid other problems.

Considering a constrained economic state that the country is in, the journey to the 100th would be tumultuous. The debts from CPEC projects have accumulated to whopping $95 bn (Rs. 11 tr). Rupee has been devalued for the fifth time since December 2017 weakening by about 27% since then. Also, the foreign exchange reserves have decelerated exceedingly. The Asian Bank of Development conjectured that Pakistan’s economic growth might fall down to just 4. 8%. This bleak situation beckons us to take immediate regulatory measures. While the incumbent government has implemented austerity measures by increasing the taxes; increasing gas prices by 35%, the inflation rate is estimated to get as high as 6. 5%. This will only make it stifling for the poor to survive. The first and foremost solution is to make the country self-sufficient.

Invest in industries and modernise the agricultural sector

The share of our agrarian economy to our GDP is around 24% (which is much lower. As a comparison, we were producing 53% of our GDP from agriculture in the year 1947). The redundant irrigation system needs an extensive upgrade. Investments in farming technology and techniques can improve crop yield. Industrially, we are mainly importers. We export raw or semi-processed goods. We are severely deficient in the production of processed goods owing to the incompetent Industrial System. Annually we spend about 2 billion USD on importing agricultural products. The bridge between our imports and exports keeps widening. Our motto should be: Substitute imports. Grow exports.

The back-to-back devaluation of rupee, however, boosted exports by many folds this year. Such improvement whose basis is solely currency depreciation cannot be relied on. Previous years, our export rate was much lower reflecting the need for upgrading our agricultural and industrial sector. With such reforms, we can unleash 12. 8 billion of the country’s export potential. On the World Bank Human Capital Index, Pakistan has scored 0. 39, whereas India secured 0. 44. Singapore garnered the top place, boasting its effective and flexible education system and healthcare facilities. The concept of Human Capital takes into account health, education and economic growth indicators of a country. On 2017 World Economic Forum report on Human Capital, Pakistan ranked 125th out of 130 countries. Relative to other South Asian Countries, our performance is the worst. Be it in terms of School Enrollment Rate, Learning Outcomes, Standardized Test Scores. Where at one end, the country’s Tertiary Education is opening to new academic forums, the primary and the secondary schools (especially those under government) are producing almost nothing! Singapore also happened to be a country of low literacy rate once but because the leaders were serious about making the change, today it is flourishing. Thirty years will not be enough for us to take Education to a new level, but with different initiatives, we can still do a lot. One such initiative is by Pakistan’s Innovation Foundation which is inspiring young students to do something sciency.

National Summer Schools also help students to see education from a real-life perspective which is non-existent in our traditional schooling. What our Education lacks is: developing skills in youth. The primary focus is laid on gaining theoretical knowledge and that too from outdated books. The Education ministry is needed to work along these lines. We spend hardly 3% of our budget on Education, which is totally unjustifiable. The consequential projects of investing in vocational training and remodelling our existing education system should come into focus. It’s only the properly educated and skilled workforce that can help us in our debt repayments. By training our population in the relevant fields, its raw talent can turn into a useful set of skills. Healthcare provision needs to be improved as well, if we are to employ more human capital. With active ageing, old could contribute to the economy efficiently. After having set the country on to this track, we shall address the problems which may impede our further investments. While China has invested hugely in Pakistan, there’s an air of uncertainty around the completion of projects and their tangible economic benefits. Such investments can also be seen as a Debt-trap Diplomacy, as apparent from our current crippled economy. The turning of days will reveal whether we become the next Malaysia or the next Srilanka.

To keep the investments coming, we have to reduce security threat to foreign investors, take anti-corruption measures and work to providing power supply with no outages. The timeline of the next 30 years possibly through high volume exports, improved human capital and a large number of skilled workers might reduce the pressure on our economy and welcome new, potential investments. We are certainly a huge market of unlimited opportunities. E-commerce, in the coming years, is likely to escalate and become a Giant for our Economy. Broadband servicing and efforts to improved Global Connectivity are ever going up. 5G telecom services are set to be introduced in the Country the next year. Also, the number of internet users in Pakistan are increasing with every passing year. 22% of the population has internet access as of 2018 whereas in 2011 only 9% of the population had access to the internet. This would increase our online business prospects to a great extent. Not all aspects of our country are dark, there has been a prominent decline in the poverty line from the 2000s onward.

The poverty headcount in 2002 was reported at 64%. This year, it stands only at 24. 3%. This trend is indeed promising and might help refine the country’s image on the international fora. This can be maintained at this statistics if the inflation rate is controlled. 30 years is a very small timeframe. Predicting a remarkable volte-face in 2047 is rather irrational. A rational mind would say small, significant changes will, however, be made. If the current economic loop is fixed with prudence and wise long-term planning, we might see ourselves in the next eleven.

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