Although this statement would sound quite familiar in Pakistan’s context but still, we are passing through a phase of extreme economic, social, political and constitutional turmoil.
This situation impacts every sphere of a country, but perhaps the worst casualty of such a prevalent situation is the Economy. A lot of leading brains in the economic sector are of the consensus view that economy moves largely on a positive sentiment.
A positive sentiment instills a sense of confidence and optimism within the country’s resourceful segments. As a result, capital is injected into the different promising and vibrant sectors of the economy.
This capital acts as the lifeblood or oxygen of the economy, and as a result, the “economic wheel” is set into motion. This in turn trickles down disposable income to the lower segments of the society, which they use to fulfill their basic and at times, secondary needs.
Where Does Pakistan Stand?
However, since the past almost two years, Pakistan is passing through a multi-pronged crisis, which has spread its wings to almost every sector of the economy. When we talk of confidence, where does it actually come from?
Well, confidence in the economy comes from a sense of certainty, whether short, mid or long term. In the case of Pakistan though, we are even struggling to instill a sense of short to mid-term certainty, let alone a long term view.
This in turn is hurting investor confidence and sentiment. It is said quite rightly that Capital is very shy. So, whenever there are clouds of uncertainty, whether economic or political, the capitalist prefers to stay away.
While the affluent segments of the society can easily “sit off” such a time of economic uncertainly, on the basis of their savings and other means, the bulk of a country’s population slides below the poverty line, in such situations.
This is exactly what has been happening with Pakistan for the past two plus years. While the rich and affluent segment of the society waits out cautiously, the economy is craving for the injection of fresh capital.
This in itself creates a vicious cycle, whereby “fresh blood” is not being injected into the economy in the form of Capital. Even investors that are actively involved in the economy think of divesting, as they rightly fear they may not be able to get a timely and safe exit, once their financial arrangements reach maturity.
What is the Way Forward for Pakistan?
So far, we have just discussed the problems of Pakistan’s economy, and its current dismal state. Now, let’s talk about the solutions, or least the bare minimum steps we can take as a country, to alleviate the existing situation:
- Remove all uncertainty surrounding the conduct of the upcoming General Elections, which will install a legitimately elected Government in place.
- Ensure free and fair elections, where every political party, worker, and the general public are allowed to participate with their free will.
- The entire state machinery, including but not limited to bureaucracy, judiciary and paramilitary forces should stand behind the newly elected Government.
- We need to mend our ties will all nations, especially neighboring countries, with a view to promoting a working relationship and bilateral trade.
- When our socio economic goals will align as neighbors, it is quite likely we would be able to arrive at workable solutions to bilateral disputes.
- Instill a sense of confidence in our expat community, and formulate policies that encourage their investment in local businesses and ventures.
- Address the sky-high interest rate in the country, which has strangulated the economy and funneled liquidity towards risk free return avenues.
- Initiate low to mid level IT skills development programs, with youth as the primary target, to boost our IT related exports.
Conclusion
Although the above mentioned steps may sound a lot, but with the right intentions, will and competence, we can take concrete steps towards the above measures, and see the positive impact they create on the economy.
Every citizen of Pakistan, regardless of age, gender, color, caste or religious inclinations will have to chip-in, and make some contribution to the above cause. God Forbid, if we fail this time, the consequences might be far worse than most of us can fathom.