Pakistan’s economy is troubled. “Deep-seated
structural problems and weak macroeconomic policies have continued to sap the
economy’s vigour,” the TMF’s executive board concluded in late November 2012.
Economic growth over the past four years, after adjustment for inflation,
averaged 2.9 per cent annually, and is projected to be 3.2 per cent in 2012-13.
That is insufficient, says the IMF, to achieve significant improvement in
living standards and to absorb the rising labour force.
In addition, prices are rising about 11 per cent per
year. The government deficit was 8.5 per cent in the last fiscal year and
Islamabad may miss its Budget deficit target this year by a significant amount.
The JMF expects foreign reserves this fiscal year to be half of what they were
just two years ago, a warning sign of waning investor confidence and a
deteriorating international economic situation.
The people of Pakistan remain extremely downbeat
about their economic plight. Roughly nine in 10 say the economy is bad,
including a majority (64 per cent) that thinks it is very bad, according to the
2012 Pew Global Attitudes survey. Just nine per cent rate the economy
positively.
There has been a sharp decline in economic ratings
in Pakistan since the beginning of the global economic recession. In 2007, 59
per cent said the economy was doing well; by 2008, this percentage had dropped
to 41 and has continued to fall since then. In fact, the 32 percentage points
decline in those who rated the economy as good since 2008 was one of the
greatest among the 15 nations for which the Pew Research Center has comparable
data.
Rupee has depreciated with regarded all foreign
currencies. A dollar now costs Rs 107. An all round shortage of essential
consumable goods has made the life of the common man miserable. Poverty has
touched abysmal depths. Subsidies have been withdrawn raising the prices of the
subsidized goods. The prices of petrol, diesel, kerosene oil have been
pitilessly increased. Fares of travel by rail, bus and air have been increased.
Rates of utilities i.e. gas, electricity and
telephone have been pushed up. Power shortage has led to load shedding
of electricity for an average of six hours in 24 hours has become routine of
life. This has badly affected industrial as well s agricultural production.
Wheat has been stocked by the hoarders and atta has become a rare commodity. A
bag of 10 kg available for Rs 200 some time ago is now being sold at Rs 500.
Prices of grocery items have increased beyond a housewife’s purchasing
capacity. Energy shortage is leading to closure of industries and workers are
being thrown out of employment. Inflation has discouraged tourism because
tourists always prefer countries where items of daily use are available at
reasonable prices. Higher prices have hurt exports because foreign buyers look
for competitive prices. Imports’ remaining the same, the fall in exports has
increased the balance of payments deficits which in turn has depreciated the
Rupee.
What went wrong? Why the economy nose-dived? What
are the causes of its downward plunge? How can the crash be averted? Answer.
Almost everything went wrong during the governance of the previous regime.
However, the situation can be saved. It would not be too difficult to restore
it provided correct remedial economic policies and strategies are followed by
observing principles of good governance.