While the ruling party of this country defends itself from allegations of rigging in the general elections, there have been reports published by international media outlets of how the country is enjoying a period of ‘optimism’. The Economist published a piece which extensively described how the national economy’s health was improving.
With expected growth at 4.7%, which is the highest rate the country has seen in eight years, and rising sales of cement and cars, which indicate the amount of construction and development, Pakistan seems to be on the road to recovery after a turbulent period. In addition, the decrease in the prices of oil has played a pivotal role in this period of ‘optimism’. The government has also successfully managed to see improvements in areas like taxation, which is one of the key drivers for growth.
PML-N helped Pakistan achieve all this, mainly due to their decision to comply with an economic plan suggested by the IMF in 2013. Pakistan’s infrastructure is making vast leaps, with projects like the Metrobus/train in major cities like Islamabad, Lahore, and Karachi. Increasing foreign investment is evidenced by the emerging presence of international brands including large fast food chains like Johhny Rockets, and Fatburger. However, fast-food chains aren’t generally the standard benchmark for assessing the health of an economy. It seems as if the ruling party has taken shortcuts and focused more on short-term improvements, instead of the long-term.
While there are numbers and economic jargon to support the belief that the national economy is in very excellent health, perhaps one needs to be pragmatic to see the other side of the coin. The first hindrance to fully recovering from the damage caused to the economy in recent years is the energy crisis.
Just last month, the World Bank said that Pakistan’s growth is being challenged by ‘energy constraints’. Looking back a few years, Nawaz Sharif and his party have repeatedly made false promises of ending load shedding which would help so many industries, like manufacturing; really maximize the amount of output. Today, the problem remains pervasive in much of the country and many industries have resorted to meet their demand by installing expensive generators which run on oil. Due to the decreased prices of oil, these industries have begun to thrive but a reversal of this would break the momentum and serve to be very detrimental to the economy.
The other hindrance to Pakistan really becoming the ‘Asian Tiger’ is the lack of security. Even if foreign entities desire investing in the country, the fact that the country has made it into international media due to massacres of children in Peshawar and attacks on minorities doesn’t help the country’s credibility as a viable opportunity. Until the government proves to the rest of the world that coming to Pakistan is not a suicide mission, foreign investment will struggle. Ventures like the Pakistan-Zimbabwe cricket tour play a large role in changing the perception of the country and invites the rest of the world to invest in the country.
The recent visit of the Chinese premier led the country has caused many to praise the government for securing large amounts of funding for projects which will help improve national economy and infrastructure in the long term. However, the security issue returns to paralyze any bright prospects as China warns Islamabad over the threat of imminent attacks by insurgents. This problem embodies the ruling party’s ambition to pursue short-term progress over long-term. It is difficult to sustain growth rates when Ismailis are killed in Karachi, and Imambargah are targeted in Rawalpindi.
It is not fair to compare today’s numbers to the numbers from ten years ago because the external factors have changed considerably. However, with one-third of the population living under poverty lines, it is safe to assume that the country needs a sustained growth rate for several years in order to achieve the goals set by the Ministry of Planning, Development & Reform, in Vision 2025. Pakistan may have built up the momentum, partly due to the ruling party and partly due to the circumstances (low oil prices), but it now needs to nurture this momentum and focus on tackling its security and energy problems. Hopefully, through process of democratic evolution, the next government will also see the mistakes PML-N made and truly help make Pakistan the Asian Tiger.
