Economy and economy alone

By now all the emerging countries have well understood that it is the economy and economy alone, which guarantees people social and political freedom leading to better education, healthcare, prosperity, national sovereignty and a respectable position in the league of nations.
In Pakistan's neighbourhood, India recognised the importance of economy around three decades back when it opted to go global invoking FDI and technology to move on a faster track to overcome the acute state of poverty its people were enduring since decades with no hope in sight. Over the years its economy leaped forward. The budget 2015 shows a total outlay of US $1.80 trillion with a defence budget of US $40 billion. The targets set for 2015 includes a GDP growth of 8%, inflation 6%, fiscal deficit 4%, current account deficit < 1.30%, tax-to-GDP ratio 10.6%, whereas, the corporate tax has been downsized from 30 to 25% to encourage corporate sector growth being one of the largest tax contributor. The ambition level of the Indian finance minister is taller than these figures and in his budget speech 2015 he stated that these incremental changes are not taking India anywhere and it has to think in terms of a quantum leap thereby aiming a double-digit GDP growth. It wants to be part of G20 club with economical and political muscles. Economic governance and black money is also a serious issue in India. In 2015, severe laws are being introduced to tackle domestic black money and for concealing foreign assets, which now includes 10 years rigorous imprisonment.
New emerging economies such as Mongolia, Myanmar, Vietnam, Cambodia and many others, which for decades were closed markets, are also now surfacing on the global map with impressive economic results drawing the interest of global investors. Pakistan is in oblivion.
Pakistan's economy is limping since almost a decade. Having touched a peak in 2006-7 with a GDP growth of over 8 % it hit its lowest in 2010-11 with GDP growth less than 1%. Over the last 5 years the average GDP growth rate is recorded as 3.6 % while industrial growth is hovering around 3% both being not sufficient to sustain a population growth of over 2%. The FDI, after touching a peak of US $8 billion in 2007 has not returned back to Pakistan and is currently hovering around US $1billion. The national debt, which stood at around Rs 40,000 per capita at the end-2008 hiked to around Rs 103,000 per capita as on end 2014, recording a phenomenal increase of 157% which means a national debt increase of 26% per year - a scary reality indeed. Remittances by overseas Pakistanis today hover around US $15 billion. We should truthfully concede that Pakistan's economy continues to be stagnant and largely sustained through remittances by overseas Pakistanis and foreign loans.
When the PML (N) took over the government control, with an absolute majority in May 2013, there were great public expectations that the country's economy will leap forward. This did not happen as government in power opted to get itself trapped in trivial issues and lost track of its main target of building up the national economy. Things eventually messed up to the extent that the government got paralysed to perform.
Halfway down the tenure, PML (N) government well manoeuvred to secure a second chance to prove its worth and deliver as per public expectations. The nation has three major issues (1) to fix the complex internal security; (2) to maintain political stability; and (3) to fix country's ailing economy. Having conceded the internal security of the nation to armed forces and having signed truce with PTI and other political parties being much on the run, the leftover issue is to fix the economy of the nation. The task of the government is now less than halved.
There is much good happening in Pakistan. There are clear signs that forces out to harm Pakistan are crippled and on the run. Holding of traditional events, after years of hibernation, like Horse and Cattle show at Lahore, armed forces parades at Islamabad on 23rd March, the sports festival at Quetta and much more of such confidence building measures has brought hope to the nation for a better tomorrow and has improved its global perception.
On the economy side too, there are many positive developments. The foremost is the Pakistan-China Economic Corridor. Its successful execution will economically and politically position Pakistan at new heights. China is eager to work on it at fast track. Pakistan must reciprocate and make things happen. Privatisation of loss-making public assets in public interest is a good development and inevitable. It must move on a fast track while ensuring transparency of the process as improper privatisation leads to cartelisation, which is a bigger evil. There are number of mega infrastructure projects being developed like urban transportation systems, motorway networks and similar. All of this must be diligently perused although there are many voices against it. But, a fair analysis will conclude that no nation has achieved economic excellence without first investing in infrastructure as the very first priority. There is a good chance to exploit natural resources at Reko Diq, Thar coal, Chiniot mines and more.
All of above is achievable by any government who opts to govern the state in public interest with honesty, transparently, professionally, boldly and efficiently. People are now aware and sensitive to issues like circular debt, the burden of foreign loans, the flight of capital, corrupt practices and its consequence on their lives. They are now conscious, as never before, that all of this money belongs to them and have the right to question how much of it is spent on their lives and how much of it is being swallowed by the managers elected by them to manage it for them. These are the benchmarks against which the present rulers will be graded.
Up to now the main reason for state failures has been on account of poor governance. The energy policies and endeavours of the government did not fly as it failed to manage it professionally from day one. The first step is to understand that party loyalists and cronies in state governance work in self interest and are inefficient and eventually discredit the political party in governance leading to its unceremonial ouster, prematurely or on term completion. Having understood this, the government must position in place managers who are professionally qualified and competent. The second step is that the government must move out of the ostrich syndrome and start taking bold decision in national interest instead of passively attempting to please all. These two basic steps alone will yield success in turning around the economy of the state.
Security and Economy of the state are interlinked and one has a lien on the other. Management of state economy is the forte of the civilian government, at which they are expected to be the best. Conceding this to others is not an option.
(The writer is Chairman Avant Ventures and former President OICCI and ABB-Asea Boverie Pakistan)