There are no quick fixes. The message was loud and clear from the Pakistan Business Council (PBC) which presented its 100 Day Economic Agenda for the Incoming Government. Not that the PBC had to say anything new – as the problems according to the PBC “have stayed the same for the past two to three years”. The solutions were not going to be any different than prescribed earlier.
Make in Pakistan and premature de-industrialization were the major themes that the agenda hit hard on. And given the present day’s economic mess, the need to address these issues could not be more overemphasized. That Pakistan’s manufacturing growth is half of Vietnam and Bangladesh, and considerably lower than India – is a worrying affair.
The trade deficit to the tune of $35 billion is surely not sustainable and the PBC warns that Pakistan is fast becoming a trading economy. The agenda laid emphasis on fixing the economy, and not merely managing it, which has been the chosen path for decades. The inevitability of going to the IMF was also heard loud and clear, however, the PBC opined it could result in strengthening of economy. Only that, numerous IMF programmes that Pakistan has entered, have mostly resulted in ‘managing’ and not ‘fixing’ the structural issues. No wonder, Pakistan keeps going back to the IMF.
The Agenda puts alignment of key policies under a high level body, to correct the balance between controlling and supporting the business. A quick look at the manifestos of the three largest political parties, any such arraignment does not appear to be part of the plan, although there are some hints towards better coordination amongst various ministries.
The other key points brought home were creating of jobs, and the number quoted by the PBC is what the PTI gave for its 100-day agenda. Recall that 10 million jobs in five years were much ridiculed, but the PBC believes it is doable, especially if the shortage of housing units is taken care of. There seems to be some cohesion on this point in the PBC’s Agenda and that of the PTI – both almost similarly named.
The other critical aspect touched upon was energy affordability, without which, export competitiveness will remain a pipedream. The overall fixing of the system is also much needed – but without bringing the energy cost down – more power alone would never result in businesses being competitive in today’s world. All manifestos have clearly included this point, but then energy affordability was also a cornerstone of the outgoing government’s last manifesto. Needless to say, a lot more needs to be done in that regard.
Equitable taxation, improved tariff regime, and realistic exchange rates have all been long advocated by the PBC, and it continues to prioritize these areas. The Agenda interestingly talks about targeting meaningful FDI, instead of chasing it. It is no secret that Pakistan needs to attract more in export oriented sectors, instead of the FMCGS, which, as pointed out by y the PBC, have short payback periods and become a drain in terms of foreign exchange in three to four years.
The PBC wants the SOEs to be put under a holding company, run by professional boards, and then privatized, restructured or retained, on need basis. Privatization has been a massive failure in the last ten years, and the political leadership showed no spine to take politically challenging decisions.
The manifestos too, do not talk about privatization, and instead focus more on restructuring.
The Agenda looks solid, reasonable, and unfortunately, more of the same, because the structural issues have remained unaddressed. The manifestos too, look solid on most grounds. But what is in a manifesto? It is the implementation. Here is hoping the PBC too, works more closely with the political parties even after the elections, and tries to have a minimum common economic agenda for the country.
