The Secretary General (Federal) of the Businessmen Panel, Ahmad Jawad, has termed current account deficit and trade deficit as a major blunder and result of last five years policies of the incumbent government. "Balance of payments will be a worrying factor for the coming government as around $ 11 billion foreign reserves is nothing for any country," he said.
Ahmed Jawad said economic managers were at their wit's end on how to bridge the yawning resource gap in the external account and avoid going into default on repayment of the country's debts. He said the country's economy was, of course, passing through a difficult period. He said it's more appropriate that Pakistan should seek financial assistance from China, Russia and Saudi Arabia to get out of the grave financial crisis it faces to bridge the country's external account deficit ahead of budget for the FY 2018-19.
"New Zealand and Kazakhstan are among other countries with smaller economies but have more reserves than Pakistan," he said. BMP leader said that today, several key state-owned institutions such as Pakistan International Airlines (PIA), Railways, Pakistan Steel Mills, ZTBL, Utility Stores, Wapda (QESCO, HESCO, SEPCO etc) and other institutions are a major drag on Pakistan's economy. Referring to the PML-N 2013 manifesto, he said, these loss-making entities' burden to the national exchequer was to the tune of more than Rs 400 billion per annum. "Reforming these state-owned institutions through a combination of privatisation and restructuring is fundamental and the PML-N's Manifesto 2013 put on record a base to start with," he cited. He said despite having the resurgence of loss-making public-sector enterprises a key aspect of its 2013 PML-N's manifesto, the performance of the party in power has remained dismal.
Jawad said PML-N promised to initiate action to turn around the loss making state enterprises by appointing independent and professional boards who in turn appoint competent CEOs of state enterprises. He lamented that the gap between what was said and what was done has pushed the country into a deep debt trap, increased income inequality, and an increasing number of question marks hovering over the economic outlook. He said ruling party had claimed that professional competence and merit would be the only criteria for appointment of boards and CEOs and their immediate task would be to manage these corporations effectively and to plug the losses.
He said, similarly, if we look in June 2013, the Public Sector Enterprises' debt and liabilities were Rs 495 billion. However, by June 2017, they had rocketed up to Rs 1.107 trillion, according to the SBP annual report. There was a net 123 per cent increase in PSEs' losses in just four years. This was primarily because the government did not settle the circular debt and parked huge sums outside the budget.
Jawad further said according to a report from the International Food Policy Research Institute, Pakistan remains near the bottom of the Global Hunger Index, standing at 106 among 119 developing countries ranked.
He said if we look into agriculture sector we got to know that our country's agricultural sector has three major roles in the national economy: provides food to consumers and fibre to the industry, earns foreign exchange, and provides a market for industrial goods/machinery. However, the share of agriculture in gross domestic product (GDP) has declined since independence, falling from 53 per cent in 1949-50 to 19.8pc in 2016-17. Pakistan's agricultural performance has been poor in comparison with neighbouring India, which has conditions similar to ours.
"We're lagging behind Indian Punjab though the condition of soil, climate and other factors is almost same," he compared. BMP leader said, similarly, we have large produce of citrus and milk and many multinational companies in the domestic market, but we couldn't translate these factors into the export of processed or value-added by-products of the farm produce in the last five years.
He said in five years, Commerce Ministry failed to revive and restructure the Pakistan Horticulture Development & Export Company (PHDEC) to support horticulture exports, had they done their job timely, today these non-traditional products could have supported country exports at a comfortable level. He said the government also failed to launch a comprehensive food policy in last five year and continuously ignored the climate change process which would hamper our agriculture sector at most in the coming years. Jawad also viewed caretaker and coming government are supposed to expedite four key structural reforms in taxation, energy, public sector enterprises and the reorientation of the Ministry of Finance and other economy related ministries well time before to benefit from emerging regional blocks under OBOR and CPEC.
"Pakistan has a sea of about 1,050 kilometres along the Makran coast with larger Exclusive Economic Zone and continental shelf. These maritime spaces offer myriad of prospects for Pakistan to exploit ocean-based living and non-living resources which can give a good boast to our economy if the policy makers look in it," he suggested.