Waqas Shabbir |
Pakistan Tehreek Insaf’s (PTI) ambitious plan while delighting the party workers, it baffled the opinion makers and opposition in particular.
Read more: PML-N denounces PTI’s first 100-day Plan
PTI presented the 24-page 100-day plan to implement the 11 point agenda that was laid out by Chairman Imran Khan at the historic Jalsa in Lahore.
The economists have voiced their opinion on PTI’s 100-day plan. Most of the experts who were asked to give a feedback on PTI plan call it an impossible target, unless, economy performs spectacularly and outperforms all the expectations and may become one of the fastest growing economies of the world.
Most of the mainstream political parties downplayed it. The leader of the opposition termed the PTI’s 100-day plan an election gimmickry. He challenged the party to implement this plan. “I will quit politics if PTI implements its announced plan,” he asserted.
Read more: PTI’s Plan for first 100 Days: Analyzing its strengths and weaknesses
Pakistan’s GDP growth is hovering around 5% mark. It was expected to improve, but, major macroeconomic failures have pushed the economy back.
Resultantly, International Monetary Fund (IMF) in its report [regional economic outlook update for the Middle East, North Africa, Afghanistan and Pakistan (MENAP)] on the economy has downgraded Pakistan’s economic growth from an estimated 5.6 % in FY2018 to 4.7 % in FY2019.
After IMF, and World Bank, Standard Chartered Plc, Elixir Securities Pakistan Pvt. and BMA Capital Management Ltd, have downgraded growth forecasts.
Though, the outgoing government of PML-N still expects the economy to grow at fast pace, but, having seen the depleting reserves and ballooning external debt and widening twin-deficit, economists have become doubtful.
In its ten-point economic plan to tackle the challenges facing Pakistan’s economic crises, PTI aims to rapidly increase jobs for youth. And for this purpose, it will unveil Pakistan’s most ambitious job Creation Strategy to create 10 million jobs across five years, along with a special focus on skill-building through TVET training
It aims to bring the crises to halt.
Now, what will the PTI government do to avert the crisis-ridden economy in 100-days? How can it create 10 million jobs in 10-years, which is 2-million jobs per year?
It may be possible to achieve this figure if Pakistani growth accelerates to 7-8% per year and much of growth comes from manufacturing sect0r.
With the passage of time, Pakistan will have to improve its competitiveness, formulate effective export and industrial policy which may discourage debt accumulation [which is expected to reach $100 billion, if rupee is allowed depreciate to further].
As suggested by the PTI to revitalize the economic growth, the main emphasis will be on the revival of manufacturing and facilitate rapid growth of SME sector.
To support the manufacturing sector in order to compete in international markets, boost exports, and create jobs, PTI will announce an immediate support package of
- reduced taxes,
- bring energy prices in alignment with regional competitors,
- clear the backlog of refund/rebates,
- launch a labor policy to safeguard workers and provide upskilling.
- introduce additional incentives for Pakistan’s manufacturing industry
If PTI manages to do this, it may create not only jobs but, exports can improve. The plan may have brought a criticism from many quarters for being an unrealistic target, but, it can work, if Pakistan manages to improve governance, efficiently manages the microeconomic situation and ensures a boost in exports through reforms in the industrial sector.
PTI also aims to improve the FBR by appointing a bold, capable and dynamic FBR chairman, reminiscing the impact of IGP KP Nasir Durrani in KP. It wants to shun regressive indirect taxation, which has been the backbone of PML-N economic policy with an equitable tax policy.
To lure the investment, and bring Pakistan among the top destinations for investment, Imran led government will build a ‘Council of Business Leaders’ to improve “Doing Business in Pakistan.”
Moreover, boosting tourism industry and transforming key public institutions will be started on an emergency basis to avoid circular debt in the future.
To lure the investment, and bring Pakistan among the top destinations for investment, Imran led government will build a ‘Council of Business Leaders’ to improve “Doing Business in Pakistan.”
In addition, to get rid of energy crises, it will immediately begin work to shift towards sustainable and affordable energy. By addressing the root cause of circular debt, initiate regulatory reforms designed to move away from rent-seeking models and towards increasing system efficiency and recovery of losses.
The PML-N government managed to produce around 12,000 MW electricity but failed to cut down on transmission losses and electricity theft. So, to bring efficiency in the system will be the key to avert the crises in future.
PTI has promised these reforms in its 100-day plan. Asad Umar who will hold the portfolio of finance minister, if PTI comes to power, presented a roadmap, where, he indicated that PTI’s economic policy will be formed by the consensus of eminent Pakistani economists.
Dr. Atiq Rehamn of Pakistan Institute of Development Economics (PIDE) said, in next 10-years, 40 million people will enter the job market, which is a huge number. So, it is not surprising for all that PTI has set such an ambitious target.
One of the most unrealistic goals is the construction of 5 million houses in 5 years. According to Sajid Amin of SDPI, Pakistan has roughly built 19.2 million houses in 70 years since, its inception. It will be ludicrously fascinating if PTI led government manages to construct this many houses in 5-years.
Read more: When Imran Khan Rules Pakistan
Some of the critics including the former minister for commerce Dr. Muhammad Zubair Khan argued that political parties including PTI have been unable to understand the problem. He believes macroeconomic management, competitiveness, and massive governance problem are the major issues facing Pakistan economy. PTI should have first given the plan to get rid of immediate macroeconomic issues.
By addressing the root cause of circular debt, initiate regulatory reforms designed to move away from rent-seeking models and towards increasing system efficiency and recovery of losses.
PTI should have first provided the way to come of the quagmire facing the Pakistan economy in terms of Reserves depleting to $10.8 billion, circulate debt increasing to more than Rs 1,000 billion and foreign debt to more than $91 billion [with Debt to GDP ratio, roughly more than 70% of GDP).
In the face of dismissal economic performance, had it not been the CPEC and lull in oil price market, economic numbers would be even more disastrous. Can PTI pull it off, remains a million dollar question?
Waqas Shabbir is a Derby Business School graduate in Finance, currently working as a freelance writer. The views expressed in this article are author’s own and do not necessarily reflect the editorial policy of Global Village Space.