Speakers at a seminar said the overall economic performance of Pakistan remained far from satisfaction during last three years. Economist Dr Shahid Hassan Siddiqui said the average GDP growth rate of the country during these three years is lower than the average GDP growth rate during last 55 years. Also, the target of growth rate could not be achieved in the last three years, he said.
He was addressing a seminar titled 'Pakistan a well dressed economy? A discussion on Pakistan's current economic challenges' organised by CEO Club Pakistan here at a hotel on Friday night. During the last three years, Pakistan debts have gone up to Rs 6120 billion, this includes Rs 12 billion in external debt. The rise in external dept in FY-16 is highest in the history of Pakistan which has gone up to$7.8 billion. Recalling, he said, the 1990 was termed as failed decade in terms of economy. Presently, as percentage of GDP, total investment, exports, domestic saving, and taxes, we are worst than 1990s, he added. "One thing which has saved us is the remittances from overseas Pakistanis. During last three years, he said, remittances of $53 billion have been received and the same was used for consumption purposes."
There are three things which are worrying, 71 percent of these remittances are coming from four countries which are subject to heavy fall anytime. Secondly, they are not real remittances as you know the money looted from the national exchequer is sent through hundi and hawala system and brought back into the country.
Sharing facts and statics he said, "We are proudly saying that our foreign exchange reserves are at highest in the history of the country. This is correct but there is also a rise of $12 billion in our external debts, he said. The country also received some $1.5 billion from Saudi Arabia as a gift. We also sold highly profitable shares to foreigners and received some $2.5 billion, he added As compared to previous years, Shahid said the country's foreign remittance increased by $15 billion during the last three years. He said the country also saved some $6 billion due to tremendous fall in the oil prices in the global market.
Our current domestic savings are at 8.2 percent, and a few years back they used to be 14 to 15 percent, he added. He elaborated that all the banks in Pakistan were earning profit of Rs 162 billion in 2013. In 2001 the total profit was around Rs 1 billion or so. But 2013-2014 the pretax profit rose more than double from Rs 162 billion to 329 billion.
"There is no example of a country like Pakistan size in the world, where the banks have doubled this profit not by attracting the business but curtailing retunes on deposits. We know all deposits in Pakistan in rupees other than the current account are on profit and loss sharing basis. Banks by law are under obligation to share that profit with the depositors and SBP is by law held responsible of protecting the interest of banks but when the profit was 162 billion the rate of return was Rs 6.5 billion whereas today, the profit is Rs 329 billion, and the rate of return to saving accounts is 3.75 billion, it means you have looted their money." he lamented.
The country's exports are continued to decline since FY-15 and today we are lower than the export quantum of 2011. Sohail Wajahat Siddiqui, former federal minister petroleum, said the country's foreign debts are continued to increase. The price of power tariff has increased by three times. The cost of doing business is increasing. He said, "Foreign direct investment (FDI) is not coming due to uncertain law and order situation of the country. There is no commercial justice in the country".
"The Chinese multi-billion investment - CEPC is not clear yet. We don't know where this money is ggoing to be spent," he said. Dr Ashfaque Hassan, Dean National University of Science and Technology (NUST) said, "I see no major progress in the country's economy during the last eight years. It's the old damaged car, and only the driver has changed." he said.
He said the economy must grow with 7 percent rate. We can't expect production capacity enhancement without investment, he added. He said that Pakistani universities are unfortunately producing unemployable graduates. A graduate has to take some 12 to 13 months to get job after he gets his degree. At present, some 60 percent graduates are running from pillar to post to get jobs but to no avail. This kind of painful situation forces them to take revenge from the society and become ruthless killers, he feared. Due to stagnant investment, the labour force participation rate is continued to decline with the passage of time. Some 2 million educated youth have left the job market for certain reasons, he said.
Ikram Sehgal, chairman Pathfinder Group and defence analyst on this occasion was more optimistic and put forward different views from other panelists. He said there are many factors which are bestowed upon the God. He said, "Pakistan has potential to feed and growth itself as it has 2nd largest copper and gold reserves and 3rd largest coal reserves in the world. The 4rth last cotton industry is in Pakistan. It's the 5th largest milk producing country. Sixth rice producing, and 7the wheat producing country in the world, he said. "This country has the potential of being the strongest country in the region." He said that the CEPC is game changer. There are roads, power stations coming, labor is there. People are coming and assisting us. We have to have more dams, and skill labours, to improve our economy.
He also rejected the criticism of other panelists on the SBP top hierarchy and praised the efforts of SBP, saying it's continues efforts made the financial institutions able to gain healthy profits. If it did not work, all banks would have collapsed, he said. Fareed Ahmad Khan CEO HBL Asset Management Company, Ejaz Nasir Founder CEO Club Pakistan, and others also spoke on this occasion.
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