The All Pakistan Textile Mills Association (APTMA) suggests that a free-market mechanism will help improve Pakistan’s economy. To clarify, the free-market mechanism is a system where the laws of demand and supply apply. Such a system is usually free from government intervention.
As a result, APTMA states that a free-market mechanism will bring economic growth to Pakistan. Currently, Pakistan’s Gross Domestic Product (GDP) is around 4%. According to APTMA, 4% is less than the required rate for meaningful economic growth. For sustainable economic growth, Pakistan needs to maintain GDP at a rate of 7-8% for the next ten years.
There are various factors that slow down economic growth. As per economic experts, political challenges, bureaucratic procedures, and lack of effective government policy and reforms have constrained the ease of doing business in Pakistan.
Read more: Pakistan needs realistic strategies for economic growth
Furthermore, government intervention puts a strain on businesses. In Pakistan, the government is involved in almost all major sectors such as agriculture, power and gas sector, banking, construction, as well as daily market activities.
Additionally, government regulations carried out by the FBR (Federal Board of Revenue) in the form of Statutory Regulatory Orders are a regular source of government intervention and hinder the competitiveness of markets in the economy.
Free markets precipitate lower costs, innovation, rapid advancement, increased competitiveness, improved productivity, improved brand recognition, new partnerships, increased turnover & through this channel, enhanced profitability. pic.twitter.com/sgcgwG6mP6
— All Pakistan Textile Mills Association (@APTMAofficial) January 31, 2022
Therefore, in order to boost economic growth, the country seriously needs to consider the concept of a free-market mechanism.
Advantages of a free-market mechanism
Free markets create competition which ensures that the best goods or services are provided to consumers at a lower price. In a free-market economy, business owners enjoy the freedom to come up with new ideas based on the consumers’ needs. It encourages innovation and enhances productivity.
Moreover, free markets create more employment opportunities. According to the Pakistan Bureau of Statistics (PBS), the unemployment rate in Pakistan increased to 4.40 percent in 2020 from 4.10 percent in 2019.
Read more: Free Market Mechanism: Driving Efficiency and Innovation
In short, free markets precipitate lower costs, innovation, rapid advancement, increased competitiveness, improved productivity, improved brand recognition, new partnerships, increased turnover, and through this channel, enhanced profitability.