In its 75 years of existence, the year 2022 was the toughest one for Pakistan as its economy lurched from one crisis to another thus bringing it to an unprecedented crossroads. The fight for power and control has created turmoil in the national economy to the extent that it is on verge of default while the government denies the fact, and keeps claiming that it has averted the situation. Even a change in military command could not bring the desired results. Natural catastrophes in the form of floods further added to the misery. It is with this baggage that Pakistan has landed into the year 2023.
With no let-up in economic gloom in sight, the quagmire is expected to continue this year. Supporting administrative measures and ill-advised exchange measures are negatively impacting the foreign inflows thus shrinking whatever fiscal space was available.
The government in an effort to please everybody has ended up pleasing nobody, especially the IMF which matters the most. If the removal of the previous government was inevitable based on the premise of bad governance, the situation has aggravated further during the last nine months. Food inflation is averaging above 30 percent and skyrocketing global commodity prices are making the situation even worse. Surprisingly, the loot and plunder continue unabated by the elite capture which depicts the disease that ails the economy.
Fiscal extravagance, low productivity and exports as well as heavy dependence on foreign debt and imports to support domestic consumption for economic growth are the main reasons why Pakistan is in such a situation. Specific to its geography, it sometimes is embroiled in the whirlwinds of global events (Russia-Ukraine War, US-China standoff) which coupled with internal imbalances make the situation more painful and messy. It seems that the global forces which could not withstand the shocks of the pandemic are trying to impose an ‘economic’ pandemic over Pakistan so that it could not break the shackles of Stockholm Syndrome.
Pakistan is presently standing at a crossroads where there is no other way out to address peoples’ economic miseries and bring them out of the poverty line, but to thoroughly undertake structural changes which means taking difficult, or rather courageous decisions within the confines of law and ethics.
Out-of-the-box and aggressive decision-making are the prerequisites to achieve structural changes which, unfortunately, have limited allowance under the current public sector environment. While lack of available human capacity is an issue across the board; however, the prevailing system needs a shake-down, and in fact may require to be erased, and start afresh, in some cases. This also leads to a big deficiency in the ownership of affairs and problem-solving approach within the public sector officers and professionals which has become more pronounced of late.
2023 is also touted to be the year of elections which doesn’t seem to be true in near future considering the budgetary constraints. If a technocrat set-up is not put into place and armed forces continue to remain apolitical as committed, the need of the hour is to select a sincere national leadership of mature and responsible politicians who could take bold decisions in the interest of the people to take Pakistan out of the quandary. Pakistan is a fairly young country with 220 million plus population having a median age of 24. If only the potential of youth is untapped through training/development and manpower exports, it could do wonders for the economy. But for that to happen, we need to have an enabling environment by removing all trust deficits. Otherwise, we will continue to see them leave for greener pastures thus eroding the demographic dividend that nature has bestowed us with.