Improve power supply, reduce fiscal deficit, enhance manpower training
With the opposition on the offensive in the election year, the government is making all sorts of claims to win over the voters, the latest being about economic performance. Nawaz Sharif told a National Economic Council (NEC) meeting in Islamabad that Pakistan is among world’s fastest growing economies. The country is nowhere among the ten fastest growing economies which have GDP growth varying from 8.6pc (Myanmar) to 6.6 pc (Senegal). Interestingly Myanmar, which is the world’s fastest-growing economy according to the IMF’s latest World Economic Outlook, still faces inequality and poverty which remain a significant problem across the country.
Growth is no doubt important. Pakistan’s economy however has to grow at a minimum 7% to absorb 1.7 million people entering the country’s workforce every year. This is a goal that Pakistan with its current 5.28 pc growth will take years to reach and that too if it maintains the momentum. The government has failed to control its expenditures and to bring under the tax net tens of thousands of retailers and people with an exhibitionist style of living. This is not going to help in maintaining the growth momentum. The government’s style of governance continues to be marked by lack of transparency which discourages investments. Arbitrary changes in ground rules to favour cronies discourage foreign investors.
The government has failed to bring in any significant FDIs. In the last fiscal year foreign direct investment inflows rose 4.8 pc to $751 million during the first eight months compared to $716m in the corresponding period a year before, with major chunk of $436m from China. While CPEC can help raise employment rate, the Ministry of Planning, Development and Reform has failed to make an assessment about the human resource that will be needed to complete the $46 billion project. What is more it has not introduced the necessary programme for training in required skills on a massive level. Any development that does not significantly add to jobs cannot be translated into votes despite highfalutin claims.