The economy of Pakistan is going through a roller coaster ride which is becoming fragile over the time, said senior economist Dr Hafeez A Pasha. He was addressing a discussion on "The Economy of Tomorrow", arranged by Fredrick Ebert Stiftung (FES) and Sustainable Development Policy Institute (SDPI). The meeting started with the question: "what is economy likely to be tomorrow?"
While giving the keynote lecture, Dr Pasha said, "Our economy is in the process of incipient financial crises. The past two shocks that Pakistan faced in 2003 and 2008 were result of sudden shocks and incredibly high increase in the oil prices. However, the crisis that Pakistan is likely to face in the near future will be the outcome of structural factors affecting the economy."
He also highlighted the issue of state capture by the extravagant elites of Pakistan which followed by the failure of government. With the assumption of Pakistan having a normal process of democracy, he proposed to opt for bailout programme by the IMF and then initiate a common economic agenda of self-reliance through political consensus. SDPI Deputy Executive Director Dr Vaqar Ahmed highlighted that the economy in 2018 will be faced with multifarious issues.
"The country's borrowing requirements will increase as the government's expenditure needs, including circular debt, expands on account of energy sector inefficiencies. Furthermore, import payments for the first four months of the current fiscal year have also grown and are projected to outstrip the export or remittances growth.
"In order to avoid a bailout from the IMF or other foreign sources, the government is expected to raise further debt through Sukuk or euro bonds. The year of 2017 was also a year of missed reform opportunities. It became more difficult for businesses, particularly small and medium enterprises (SMEs) to do business in Pakistan."
Dr Vaqar also informed the participants that the most notable loss during this meeting is the reduced interest of China in prioritizing Special Economic Zones (SEZs). "Balochistan that requires SEZ the most was not helped by the federal government towards feasibility preparation. Hence, no SEZ for Balochistan has been prioritized under CPEC for the time being," he added.
Dr Aliya H Khan, a senior economist, emphasized the use of available resources and statistics to create an economic agenda. However, she gave the audience a question to think as to what CPEC will be doing for the huge youth bulge of the country and how it helps in unbalanced regional development of the nation.