Once upon a time in a land called Pakistan, renowned economist Dr. Jeffrey Sachs stood before the Sustainable Development Policy Institute in Islamabad. He spoke passionately about the economic challenges that plagued the country and the urgent need for investment. Pakistan's economy was suffering from low growth, with negative growth projected for the current year. The education and healthcare sectors were in dire need of improvement, and domestic investment was insufficient. Sachs emphasized the importance of a national investment plan, drawing inspiration from China's success. He outlined six key areas for investment: education, healthcare, energy, sustainable land use, urban renewal, and digital transformation. To achieve this, Pakistan needed to increase its revenue collection and savings rate. Sachs also stressed the importance of managing national debt and attracting long-term loans and investments. He concluded his speech by urging Pakistan to take action, mobilize resources, and implement pro-people governance to address its economic crisis.
Meanwhile, in another corner of Pakistan, a newspaper article titled 'Prerequisites for attracting sustainable foreign investment' caught the attention of the nation. It highlighted the crucial role of foreign investment in the economic growth and development of emerging economies like Pakistan. The article emphasized the need to establish an environment that prioritizes robust contract enforcement, the rule of law, transparency, and democracy. Pakistan was urged to strengthen its legal mechanisms to ensure efficient and impartial resolution of disputes. Streamlining legal procedures, implementing alternative dispute resolution mechanisms, and ensuring a fair and timely judicial process were identified as key steps. The article also called for strategic reforms to fortify the pillars that sustain foreign investment, such as the rule of law. Addressing the backlog of pending cases, tackling corruption, enhancing corporate governance, and improving democratic governance were highlighted as essential measures to attract foreign investors. The article emphasized that a transparent and participatory democratic process fosters a sense of civic responsibility, inclusivity, and national pride.
These two narratives shed light on the interconnectedness of Pakistan's economic challenges, political instability, crime control, citizen engagement, and the need for investment. Both Dr. Jeffrey Sachs and the newspaper article emphasized the importance of comprehensive reforms and the involvement of various stakeholders, both domestic and international, to overcome these challenges and foster economic stability and development in Pakistan. It is clear that Pakistan must build a strong foundation for economic growth and development by prioritizing education, healthcare, energy, sustainable land use, urban renewal, and digital transformation. At the same time, it must strengthen its legal mechanisms, address corruption, enhance corporate governance, and improve democratic governance to attract sustainable foreign investment. Only through collective efforts and a shared vision can Pakistan overcome its economic crisis and pave the way for a brighter future.
In a recent opinion article titled 'Search for identity' by Mansoor Ahmad in The News International, the focus shifts to the importance of transparency and accountability in Pakistan's economy. The article highlights the lack of transparency and accountability in the government's management of economic affairs, which has led to malpractices, increasing inequalities, and intolerance towards religious and political differences. These factors have damaged the social fabric and economy of Pakistan. The article criticizes the flawed inclusive growth policies that rely on protectionism and subsidies instead of creating sustainable jobs. It also mentions common issues such as smuggling, underinvoicing, and wrong declaration of goods due to a lack of accountability. The article calls for the creation of inclusive markets through skill development and education, as well as addressing corruption to redirect efforts towards creating wealth. It highlights how terrorism, negligence in healthcare, and rampant corruption have caused Pakistanis to question their identity. The article emphasizes the need for sensitive and connected rulers who prioritize the well-being of ordinary citizens. Overall, the article underscores the importance of transparency and accountability in Pakistan's economy and its impact on the country's social fabric and identity.
Adding to the discussion on Pakistan's economic challenges and the need for a comprehensive vision, an article titled 'Dire need: Economic vision' by Sirajuddin Aziz highlights the urgent need for an economic vision in Pakistan. The author emphasizes the importance of courageous and decisive leadership that is perceived as honest and patriotic. The article highlights the need for trust in the tax system and the importance of abiding by laws to increase revenues and reduce debt. It also calls for a major transformation of the economy, focusing on innovation, sustainability, and inclusive growth. The author suggests developing human capital, upscaling skills, and growing the manufacturing base. The article mentions the need to address circular debt, explore renewable energy sources, and efficiently manage natural resources. It calls for robust infrastructure, integrated thinking, and congruent policies. The author emphasizes the need for political consensus on economic changes and strict accountability without political victimization. Overall, the article emphasizes the need for a comprehensive economic vision and leadership to achieve sustainable development in Pakistan.
In another perspective on Pakistan's economic challenges, an article titled 'Army, Political, Feudal & Business Elite Don’t Want What Pakistan’s Economy Needs?' by Najma Minhas discusses the factors hindering Pakistan's economic growth and reform. The article highlights the low income levels and lack of domestic demand that limit Pakistan's industrialization and manufacturing capabilities. It emphasizes the importance of trade and integration with regional economies, such as India, for sustainable growth. The article also points out the lack of investment and capital in Pakistan, which affects productivity and wages. It attributes the boom-and-bust cycles in the country to short-termism in political decision-making and the rigidity of the economic system controlled by the elite. The article argues that democracy is essential for long-term economic growth and adaptability to global changes. However, it acknowledges the challenges of achieving reforms in a system where the interests of the elite are prioritized. The article concludes that Pakistan's economic growth is hindered by the lack of a flexible and adaptable system that represents the interests of the people.
In Bangladesh, experts have also highlighted the need for tax reforms to raise the tax-GDP ratio. Economists and professionals at a roundtable discussion emphasized the need to reform Bangladesh's taxation system in order to increase its tax-GDP ratio. The current ratio is low compared to neighboring countries such as Nepal, Sri Lanka, and Pakistan. Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, highlighted the importance of adjusting direct tax to achieve fair income distribution and called for a more efficient tax administration. Shamsul Alam, former state minister for planning, stressed the need to improve the taxation system to attract more foreign investors and increase expenditure on social protection, education, and health sectors. Mohammed Forkan Uddin, president of the Institute of Chartered Accountants of Bangladesh, suggested integrating the National Board of Revenue with other departments and organizations. He also recommended special audits on companies dealing with essential commodities to stabilize prices. The experts called for digitizing the taxation system to eliminate underhand deals and exempting taxes on fundamental commodities like rice and potatoes.
In Pakistan, Prime Minister Shehbaz Sharif emphasized the potential for Pakistan to outperform India and other economies with hard work. He stated that Pakistan has the potential to collect over Rs24 trillion in revenue, three times the annual revenue target. However, corruption, inefficiency, and negligence are causing around three times the annual revenue target to be lost. The tax evasion in Pakistan is estimated to be around Rs5.8 trillion, which is 6.9% of the GDP. In contrast, India collected a record $25.15 billion in gross goods and services tax (GST) in April, a 12.4% increase from the previous year. PM Shehbaz stressed the need for expanding revenue collection and addressing the challenges faced by Pakistan, including the need to seek loans and approach the IMF. He also highlighted the importance of reward and punishment in making progress and expressed the government's commitment to separate the corrupt from the honest in the Federal Board of Revenue (FBR). The PM awarded shields to honest and hardworking FBR officers and vowed to promote officials based on merit. He mentioned the recovery of Rs2.7 trillion held up in various appellate forums and the recent Rs756 billion sales tax scam, directing authorities to recover the looted money. The PM expressed pride in the honest officers of the FBR and their role in the development and prosperity of the country.
In another perspective on Pakistan's economic potential, an article titled 'Pakistan: A Sporting Nation Poised for Economic Growth' by Manahil Jaffer discusses the potential for economic growth in Pakistan through sports. The article highlights Pakistan's love for sports, particularly cricket, and the opportunity to capitalize on the global sports market, which is expected to grow to US $707 billion by 2026. Pakistan is already a sports goods manufacturing powerhouse, particularly in football, generating over US $1 billion annually. The article suggests expanding production into other sports equipment and catering to the global sports market. Investing in youth sports involvement can enhance employment chances, and developing infrastructure, training programs, and grassroots initiatives can contribute positively to the national economy. Upgrading stadiums, constructing sports complexes, and organizing professional leagues are needed for a robust domestic sports industry. Sports tourism offers immense potential for Pakistan, with the opportunity to host international events and develop adventure sports. Building a strong sports brand and using technology and social media for promotion is crucial. Challenges include enhancing security, attracting private sector investment, combating corruption, and improving governance in sports administration. With a clear strategy and collaboration among stakeholders, Pakistan can transform its sporting enthusiasm into long-term economic prosperity.
In a recent article titled 'Balanced investment to GDP ratio to ensure economic stability: Experts' by The News International, it is highlighted that the private sector investments in Pakistan are heavily influenced by a small number of strong firms and their decisions influence the interest rates as well as several other factors. The interest rate in Pakistan is now 22 percent, having almost tripled since June 2020. The ratio of investments to GDP dropped from 15.7 percent in May 2019 to 13.3 percent. Additional Secretary Finance Aamir Nazir Gondal emphasized the need for a thorough investigation into investment matters to develop evidence-based policies. Former federal minister for commerce and trade Gohar Ejaz highlighted the adverse effects of high interest rates on sectors like textiles, industry, and real estate. Nasim Beg, CEO of Arif Habib Consultancy, emphasized the need for sound policy interventions to spur sustainable growth and economic resilience. The article discusses the relationship between interest rates and investments in Pakistan and the importance of attracting new investments and recovering development by making the most of current resources. It also mentions the unreported money undercurrent in the economy and the need for policy interventions to address it.