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The anger in the Pakistani public is growing.

The moment we see a rising trend


where more and more people take to the streets to solve their grievances, we are
reminded that public confidence in the ability of government and state
institutions is waning and their frustration is growing. More dangerously, once
mob power becomes the norm to achieve ends, the trend can spiral into anything.
Pakistan, which is already struggling economically, can ill afford such adventures
that tend to create instability. That is why it is so important for this government
to start delivering on the economic front before it gets too late!
Given the serious human resource constraint in Pakistani politics, many amongst
us are beginning to simply question the ability of Pakistani democracy to deliver
good governance on a sustainable basis. However, one is often reminded time
and again by the desperate political players that even an un-democratic thought
is tantamount to blasphemy and how “even the worst democracy is better than
any other form of government” - Point taken, but the question remains that if so,
then for whom? Also, one is willing to ignore their kiddish rivalries, pompous
personas and grant them their steep perks and fancy flag cars, but it is quite
annoying to note that, when it comes to addressing the real issues, it is all
rhetoric and no substance. Governance being handed out lacks any measure of
micro management depth with the result that even if the direction and intent are
correct, implementation failures end up making matters worse than before.
“There is no trick to be a humourist when you have the whole government
working for you ~ Woody Allen”. Now relate this to an announcement of a few
back days by our government circles that GDP growth rate target is being revised
upward to 3.50 percent for 2010 and one can’t help but laugh. All around us, we
see total gloom and doom with regard to any meaningful economic activity and
amidst this tough setting the economic managers have the cheek to make such
claims. They need to be told that as if the absence of electricity for more than 12
hours a day was not bad enough, we now have a situation where the natural (Sui)
gas supplies also stand disconnected for as many as three days in a week and that
too in the main industrial centres of the country. By rough estimates a closure in
the textile spinning sector alone causes an activity loss of Rs 2 billion over 12
hours; based on this official circles are welcome to do their own permutations,
which will only tell them that closures of up to 120 hours a week in the entire
national industrial base (within which textile spinning is roughly 5 percent of
GDP and total textile sector accounts for between 10-12 percent) will generate a
compounded negative effect on economic activity using a multiple of eight for
every rupee lost. If my mathematics serves me right the monthly loss will amount
to nearly 10 percent of the total budgetary lay out, and if you have a quarter (3
months) of such disruptions in a year, it means an erosion of nearly 30 percent
outlay - in effect resulting in a negative growth rate!
The challenges, unfortunately, don’t stop here. Add to this:
a) A looming food shortage due to a projected slump in the overall agri-produce
of Pakistan owing to absence of timely rains and Indian terrorism breaching
bilateral water treaties blatantly;
b) Incompetent supply side management of food essentials by the government;
c) Rising global oil price;
d) Stubborn inflation; and
e) A declining value of the Pak Rupee, and the outlook becomes even more
depressing.
To make matters worse, bad news is coming from where least expected. One
would have thought that in spite of all the disadvantages of having to engage with
the IMF, at least one good thing of this relationship would be fiscal prudence?
Sadly not to be, as the recent State Bank’s report reveals that circular debt is
rising and no longer just limited to the power sector but also engulfs the
agriculture sector, public borrowing from financial institutions is at an all time
high (so much so that as a result the private sector stands visibly squeezed for
finance) and last but not least the very composition of the fiscal space is turning
unhealthy by being comprised more and more of profit funds rather than revenue
collection.
Today, the Pakistani public is perhaps feeling not much different than those of
Iceland. Duped by the brinkmanship of their leaders in the pre-recession era of
loose credit and unbridled globalisation, both are struggling to reconcile
themselves to decades of debt repayment, high taxation and budget cuts on basic
public spending. Though we walk on an almost identical road to recovery, the
results are not the same. While they seem to be cantering their way out of trouble
we, on the other hand, are slipping backwards. Iceland’s economy has become
buoyant, market confidence has returned and debt per se has come down vide
their debt retirement support arrangement with the IMF, whereas, exactly the
reverse has happened in our case.
Governance, as portrayed by the rising incidents of revenue waste and leaks, is
today our main problem. Rising fiscal debt, shrinking economic activity,
increasing unemployment, feared resource waste, stubborn inflation and growing
inadequacy of domestic resources to meet national needs are all very worrying
signs. The growing perception that most of these are governance-triggered is
something we need to tackle not just for us but also for the international
community. Donors and Friends (of Democratic Pakistan) will not come forward
with their support till such time that they feel their funds are going in competent
hands and will be well spent. Democracy is great, but a system one dare say is as
good as its results and then within systems there can be overlaps and
adjustments relating to environment, culture, history, religion, demography and
geographical realities. Not long ago all our Western friends just couldn’t stop bad
mouthing China; however, time has proved that the Chinese cocktail of
capitalism and authority may just be the best model for the world to follow!
Economy of Pakistan.

Pakistan economic growth faced a serious set back in fiscal year 2009 because of the depressed consumer credit market, slow progress of public sector
programres, inflation, reduction in subsidies, security threat, instability in the state and energy crisis. Additionally, no attention was given to the agriculture sector.
The exports declined by six percent and imports by 10 percent. The only thing that became a silver linning was the increment in remittances by 22%. Apart from
ignorance, agriculture sector has shown credible results because of good weather. Major crops, wheat, rice and maize recorded impressive growth i.e 7.7%
against the target of 4.5%. Live stock and poultry also add to GDP as there was no viral disease this year.

Shortages of energy and power donot let the boom entered into the industrial sector. In addition the sanction applied by IMF on different sectors creating a hurdle.
This resulted in unemployment and services sector decline. Because of security crisis the graph of investment do not take any surge. The beginning of declining in
core inflation is a hopeful factor but the domestic inflation is on peak. There is a marginal improvement in health and educational sectors but the poverty in country
rise Pakistan have the highest population growth. The largest population represents a large potential market for goods and services yet the condition are
deplorable.

Being an agro based economy Pakistan should focus on the development of agriculture department. Financial sector
should be developed. Instead in focusing to much on macro financing, micro financing must be given a chance. Trade deficits should be reduced. This can only be
done by eradicating the trust deficit, which will boost our exports as well as imports. It will also bring FDI’s (Foreign Direct Investment) at home. There should be
short term as well as long term policies. As Pakistan’s economy is dependent economy so it should be made strong enough to reject the foreign aid or loans on
their conditions, which can directly or indirectly bring harm to the economy. Still the Government is unable to differentiate and reorganize the developed and non-
developed budget. Solid fiscal policies should be made to give advantage to both, demander and supplier. This would also be beneficial for the skilled workers,
who fly away from the land. Despite all these, there must be political, economic and social stability in the state. A proper accountability set up must be introduced
to eradicate corruption as it leads to massive human deprecation. And the final solution of this problem is good governance.

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