Playing catch-up

There has been an air of optimism of late regarding economic growth in Pakistan. People are rushing towards real estate projects and banks to buy stakes in mutual funds. Things are swell, on a microscopic level, but zooming the lens out onto a macroscopic one, we see that Pakistan’s economic progress is gradual at best. This conclusion is based on the World Bank’s report entitled, “South Asia Economic Focus Fall 2016: Investment Reality Check.” Pakistan trails behind Nepal, Bangladesh, Bhutan, and of course, perhaps its biggest archrival, India. India’s forecasted growth for fiscal year 2017 is 7.7 per cent, compared with this year’s 7.6 per cent. Pakistan’s projected growth for the next fiscal year is five per cent, compared with this year’s 4.7 per cent. Together, Pakistan and India comprise 90 per cent of South Asia’s GDP, which, includes eight regional countries. The report’s indicators for Pakistan reflect positively and the take-home message touts ‘slow and steady wins the race.’

There are several reasons for which we can gloat in the release of this report. Whereas for the South Asian region overall industrial production has lost momentum, Pakistan’s production has picked up pace in terms of construction and large-scale manufacturing. Most of the propelling force is accredited to the CPEC agreements. Caution must be heeded going forward, however, insofar as the first year of the CPEC projects closes and the delays in development that could decelerate the forecasted rates of growth. In addition to CPEC delays, the belligerent echoes calling for war on the eastern border between Pakistan and India are a threat to both economies. The most controllable of the confounding factors is the government’s ineptitude in rationalising expenses and mobilising revenues towards justifiable causes, according to the report. We need to ascertain the correct intentions are in place and then hire the expertise needed to allocate funds so that investment confidence is not shattered

Published in The Express Tribune, October 12^th, 2016.

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