A special discussion was organized at the "Express Forum" on the current economic situation of the country and government measures, in which economists, academia, and industry representatives were invited. The discussion in the forum is open to the readers.
Professor Dr. Mubashir Munawar Khan
(Dean, Faculty of Commerce, University of the Punjab)
Structural reforms are needed in the country at this time. Our bureaucracy makes policies that do not bring about change. If policies are made in consultation with academia, industry and other stakeholders, it will be of great benefit. This will also make implementation easier. But if we do not change our approach, the journey of development will become longer.
If we look at the current economic situation of the country, the indicators are positive. Political and economic stability and the geopolitical situation are improving slightly. Daily inflation is now under control. The increase in the dollar has also stopped, the stock market is setting new records, which is positive in terms of the economy, all the credit for this goes to the government. It is also true that there has been no difference in the life of the common man yet, inflation has stopped, it has not decreased, nor have the prices of food items decreased. The common man will feel relief when his purchasing power increases, inflation decreases and his life improves.
At present, a big problem is excessive government interference in business. There are more than 20 departments that have created problems for the business community, our entire industry has gone to trading, after the increase in the dollar, imports stopped, so some turmoil started here. The government has to provide a conducive environment for business. Udan Pakistan is a good brand. This is the 13th five-year plan. It has 5E's which include economy, export, environment and others.
Big goals have been set in Pakistan. The goal is to create a $3 trillion economy by the 100th anniversary of Pakistan's independence. The question is how will all this be achieved? No roadmap has been given in this regard. Nothing has been done for ease of doing business. If the country's economy is to be truly stabilized, the government will have to be the least government, eliminate undue pressure on business, and get rid of business control.
The government has set a target of taking exports to 60 billion, the US is imposing sanctions on us, various issues are being linked to GSP Plus, how will this target be met in such a situation? Of course, the government will also be keeping an eye on these factors, so which market will be exported to? Will Central Asia be our market? At this time, educational institutions have an important role to play in researching and guiding the government on where the opportunities are and how to achieve them. We have excellent researchers and experts, but unfortunately, they are not being utilized. Research is only limited to libraries, while policies create bureaucracy.
The country is being harmed by the policies made in the closed rooms of the bureaucracy. For economic stability and the success of projects like Udan Pakistan, a long-term policy must be made in consultation with all stakeholders. All political parties, the business community, academia and other segments must be included in this. The Udan Pakistan project does not mention overseas Pakistanis who earn money from abroad and send it to Pakistan. We must also pay attention to overseas Pakistanis to increase foreign exchange reserves. Everyone is patriotic and thinks only of the country, so for the survival of the country, the three major political parties should sit together and prepare a plan of action to get the country out of its problems with consensus.
Muhammad Nadeem Qureshi
(Former Regional Chairman, FPCCI)
Work on the Charter of Democracy in the country has been done before, and is still being done, but work on the Charter of Economy has not been done till date. When I was the Regional Chairman of the Federation of Pakistan Chambers of Commerce and Industries, at that time we tried to bring together political parties in the FPCCI so that they could agree on the Charter of Economy, but the political parties could not make any progress in it. We still say today that until there is a Charter of Economy in the country, neither economic stability can be achieved nor projects like Udan Pakistan can give significant results.
The biggest problem we have is that we do not make a plan but a wish list. Stakeholders are not consulted in this, FPCCI and business chambers are not taken on board, due to which an effective policy is not made, an implementation plan is not made and then the goals are not achieved. Therefore, if the government wants to achieve development goals, it will have to consult all stakeholders instead of bureaucracy.
The reason for the boom in the stock market is the change in its model, banks have created 'mutual funds' after which billions of rupees of their money are available in the stock exchange, money from real estate has also gone into mutual funds, so when other business activities start, this money will go there and there will be a big change in the stock market. More than 65% of our population is young, we have to spend on them, by training them in IT and entrepreneurship, the goals of Udan Pakistan can be achieved. We are not focused on agriculture. The government talks about giving subsidies to farmers.
Don't make them beggars, but convert all tube wells to solar, provide good and quality seeds to farmers, focus on research in agriculture. Palm oil imports are close to $6 billion, can't it be worked on in Pakistan?
During the wheat season, wheat is cultivated on 25 million acres, if sunflower and mustard are cultivated on 2.5 million acres, then our import needs can be met. In my opinion, the economic goals of Udan Pakistan can be achieved only through the agriculture sector. We have to work on this. In addition, the business community should be freed from unnecessary hardship. Make business tension-free by making a long-term policy, give freedom for three years, then the destiny of the country will change.
Dr. Qais Aslam
(Economist)
An attempt is being made to run the country through withholding tax. No tax is being levied on retail, but the burden is being increased on the salaried class. The income tax of the salaried is deducted, while no one lays a hand on the big tax evaders, they enjoy a free hand.
The government should understand that unless profits are taxed and input taxes are abolished, the economy cannot function. On the one hand, our tax targets are not met, on the other hand, tax evasion occurs, and thirdly, politicians and the bureaucracy are being given free houses, cars, and other incentives.
All this is harmful to the economy. Our economy is running on smuggling, bribery and tax evasion. This money is flowing out of the country, which is weakening the economy. The Prime Minister has taken a good step under Vision Pakistan, in which the economy, social sector, information, transport and infrastructure will be improved in seven ways, hopefully it will work. During the PDM government, a National Action Plan against terrorism was made, in which the first priority was to improve the economy, but the economy has not been improved yet.
Trade deficit and debt have increased, in this government, debt has reached 69 percent of GDP and our industry has come to negative 1.4. Agriculture has given 1.1 percent while the service sector has given 1.5 percent growth. It was thought that the economy would grow by 2.5 percent but it is 1.9 percent which is quite low. We are under pressure due to IMF loans. Due to this, the government is not able to reduce electricity rates. More than half of our population cannot earn more than Rs 1,000, so it does not have purchasing power, due to which there is a lack of demand and industry is not being established here. Our industry has moved to other countries. The money of corruption has gone to other countries.
The agreements with Saudi Arabia and the United Arab Emirates are welcome. The UAE has rolled over its loans of 2 billion and China has also rolled over its loans, Saudi Arabia has placed 3 billion in our banks, and the IMF has also received 1.5 billion. All this has increased our reserves, which is a good thing, but the economy cannot be run with this poor tax system and such a big government. Our population has reached 250 million, of which more than 60 percent are young people.
They need 60 million jobs, this need will be met by the private sector. It is welcome that the interest rate has come down to 13 percent, it should be 8 percent so that people can do business by taking loans. During the era of General (retd) Pervez Musharraf, there were consumer loans that powered the car, motorcycle and mobile industry. At present, our production cost is high, due to which business is running on smuggling. There is political instability in the country, the law and order situation is bad, the opposition has been put on the wall, the government has a hand in every sector of the economy.
There is no competition in power plants, banks and other businesses. There are problems in Balochistan, our youth are being martyred every day. Until peace comes to the country, political and institutional reforms are not brought, and the justice system is not fixed, the problems will not be solved. Our institutions are fighting among themselves, there is no transparency and accountability, due to which the country is stagnating. Our exports are not increasing, the products are not of world standard, we have to work on this. We have also been badly affected by the floods, but we are still not serious about changing ourselves. At present, the United Nations' Sustainable Development Goals are not being worked on in the true sense, we should understand that unless we work in every direction, the problems will not be solved.