Economy on the upward curve - I

16 Apr, 2014

The Annual Public Pulse Report for 2014 issued by Gallup Pakistan maintains that there has been a massive improvement in the ratings for overall performance of the PML (N) government (59 percent) as compared to the performance of the previous government during the last year in the office.
Gallup which enjoys the highest credibility for such surveys, claims that economy has recorded positive 48 percent comparative net performance, Pak-India relations 22 percent, foreign policy 33 percent, terrorism control 31 percent, corruption control 36 percent and inflation control a positive 20 percent. The graph of popularity of Prime Minister Nawaz Sharif who is the architect of this turnaround is also on the highest rung as compared to other political leaders in the country.
The Gallup report has undoubtedly added credibility to the claims of the government in regards to an enhanced performance in these areas, particularly the revival of the economy. The paradigm shift in the conduct of foreign relations, more so the revisiting of the strategy to deal with India and adopting a policy of non-interference in Afghanistan and building regional linkage for a shared economic prosperity, is a visionary move that fits well into the emerging regional and global realities. Moves to improve law and order situation in the country and tackling terrorism have also started showing positive results though a lot still needs to be done in these areas. The indicators in regards to the economy are indeed very encouraging.
When the PML (N) government was installed in May 2013, the economy was on the verge of collapse. The country faced a severe energy crisis. Economic growth rate was below 3 percent, inflations was at double-digit, interest rates were high, budget deficit stood at 8.8 percent of GDP, investments were abysmally low, foreign currency reserves stood at the lowest level and the country faced default on IMF loans.
It is a verifiable reality that the government, immediately after assuming charge accorded top priority to dealing with the energy crisis. Circular debt of Rs 500 billion was immediately retired which resulted in an addition of 1700MW to the system easing the position in regards to power outages. With a view to overcome the present energy shortages and also catering to the future energy needs, the government has established an energy part at Gaddani where ten coal-based energy producing plants with a cumulative power generating capacity of 6600 MW would be installed over the next five years. Ground breaking ceremony of a nuclear power plant at Karachi with Chinese assistance which would start producing 2200 MW of electricity by 2017, has also been performed. Steps have also been taken to covert the existing oil-based power plants to coal-based units to curtail the oil bill and also to ensure cheaper electricity to the people in future. Reportedly negotiations are at an advanced stage with the US government and investors to launch new projects in the energy sector.
The government successfully negotiated a fresh loan with the IMF to save the country from a virtual default on loans. It has won GSP Plus status for Pakistan that is estimated to boost our exports to the EU countries to the tune of US $2 billion. The government claims that due to its efforts to reform the economy, inflation has been restricted to single digit, GPD growth rate has been taken to a higher pedestal than the previous year, exports have increased by 5 percent, remittances have gone up by 9 percent, decline in the rupee value has been arrested, revenue collection has experienced 16 percent increase and the government is well on course to bring the budget deficit down to 5.5 percent from the existing 8.8 percent by the end of the fiscal year. Prospects of foreign investment are also very encouraging.

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