Political stability a must for growth

In recent years, political stability has emerged as a cornerstone of economic prosperity in Pakistan, a highly challenging task for politicians to salvage the country’s economy.

Of course, this needs a greater understanding, especially of national issues, by the political allies and opponents to serve the ultimate purpose, ie, progress of the country and its population.

The 2024 general elections have somehow pushed the country forward in terms of political stability. One can argue and ask how much political stability has been achieved, but the coalition government, led by Prime Minister Shehbaz Sharif, has apparently managed to kick-start things for betterment, both on the economic and external fronts.

According to some analysts, the government has been able to win the trust of major global lender, the International Monetary Fund (IMF), by successfully completing the $3 billion standby arrangement. However, it has come with some political cost as tough economic decisions propelled inflation to a record high of 38% in May last year.

“There should be a forum which can serve as a platform for political parties to iron out their differences; this is the need of the hour for further smooth progress after recent developments,” said Dr Abid Qaiyum Suleri, Executive Director of the Sustainable Development Policy Institute (SDPI), while talking to The Express Tribune. He added that things had definitely moved towards improvement as Pakistan completed the short-term IMF programme without seeking any waivers.

“We are now going for another loan programme and with this, the country’s creditworthiness has improved among bilateral and multilateral partners,” he remarked. “The second aspect is the SIFC (Special Investment Facilitation Council) where all important stakeholders are represented with a proper follow-up mechanism.

This is the reason why China, Saudi Arabia and the UAE are announcing investment commitments of billions of dollars. It is the right time to draw up a long-term plan for better utilisation of such investments,” Suleri stressed. Analysts pointed out that the economic reforms package of 2023, which included measures such as tax reforms, increased spending on social programmes and improvement in public sector efficiency to sustain economic growth and reduce the fiscal deficit, was also a reason behind the improvement in the economy, which pulled down inflation to 17.3% in April 2024.

“Recovery is always a painful process and we have to wait with patience for a longer period before enjoying good results,” said economist Shahid Zia. He emphasised that Pakistan’s economic recovery might not take a longer time period as contrary to the external factors, a strong grip over the internal situation could improve things dramatically.

“The government is undertaking fiscal reforms, but there is a dire need to expand its administrative role by controlling inflation, smuggling, energy theft and the associated issues.”

Apart from creating a peaceful political environment, people’s confidence in government policies is also a must to stave off the spread of rumours that damage the country’s image. “Confidence-building measures are critical for the execution of the government’s long-term plan, where Pakistan’s GDP (gross domestic product) is projected to grow at an average of 5.5% per annum over the next five years,” Zia said.

“The government has managed to regain the trust of its overseas friends through difficult fiscal decisions and reforms. Now, there is a need to harmonise the political stability and stick to the economic recovery plan to further cool down inflationary pressures.”