Misplaced hope

Being short of smart ideas, the government is pinning hope on the construction sector to revive the moribund economy. An ordinance was issued to encourage investment of dirty money in the construction business with disclosure requirement about the source of finances having been dispensed with. Besides, a number of tax and fiscal incentives have been promised. The construction industry is not construed as an engine of growth and does not generate or save foreign exchange. On the other hand, it is dependent on import of certain items/ingredients causing outflow of scarce foreign exchange funds. Had the construction sector been a barometer of economic enrichment, the oil producing countries of the Middle East, undertaking large infrastructure/visible projects, would have become advanced economies of the world rather than being dependent on other nations for everything they need.

Housing societies, luxury apartments, shopping malls, showcasing foreign brands, and impressive buildings and towers do not support a resilient national economy. Agriculture and manufacturing are the key drivers of growth, employment, generate dollars through exports and save dollars from import substitution, stimulate harnessing of technology and infuse creativity. The state of agriculture in Pakistan is pathetic and we are still using pre-1947 techniques. We have a nascent industrial base with little actual manufacturing activity and more of an assembling and packaging function. The present situation is challenging but also offers a window of opportunity. With the global slump, Pakistan’s exports and remittances would be severely impacted and a significant decline is expected. Pakistan must therefore focus on import substitution to reduce the import bill and offset the impact of falling dollar inflows. Focusing on improving agriculture and setting up manufacturing units to replace imports can help us in the current predicament. Obtaining foreign loans to tide over the crisis can further clip our economic sovereignty.

Arif Majeed

Karachi