Grand economic reset & agenda 2047 — I

Economic indicators are not encouraging at all, rather the indicators exhibit scary picture. Debt crises has entangled whole economy and lenders are dictating Pakistan. Pakistan does not have much space to play. Pakistan is slowly moving towards policy trap from the debt trap, which was skillfully woven by international financial institutions. Pakistan is struggling to find a way out to revive economy. The revival of economy is required to create jobs for youth bulge and sustain respectable position among the global community.

Pakistan is in desperate situation, as opportunities for revival are scarce. The situation demands a wise policy and action framework, which must be designed according to the ground realities and needs of the country.

The analysis of historical data suggests that economic and development turnaround of a country is only possible through the right set of policies, consistency in policy and application of indigenous wisdom. The policies, models and plans, which are tailored according to the ground realities of country, always lead the way for economic growth and development.

Unfortunately, Pakistan has been victim of “Fancy Ideas” or “Fancy Models” which do not correspond to the needs and ground realities of Pakistan. Thus, Pakistan needs to correct course of action. Before designing any policy or action framework Pakistan must concentrate on five questions or “What’s”.

First, what is required to uplift the living standard, ensure the prosperity of everyone and tackle issues like poverty, food insecurity, unemployment among youth etc.? Second, what resources Pakistan has in kitty to invest. Third, what should be strategy to execute the policy or plan? Fourth, what is state or quality of human capital? Fifth, what are systems for the equal distribution of resources and opportunities? Moreover, Pakistan will also have to search out which country or region can help to give impetus to economic revival by acting as anchorage country.

These questions will help to rationalize the policy and action framework. By keeping in mind these questions, “Economic Agenda 2047” for Pakistan has been conceived. Moreover, a phase wise manner strategy has been designed to achieve the “Economic Agenda 2047”. Each phase has been designed by focusing the ground realities.

However, it is pertinent to mention here that, each phase only highlights the priority areas for that phase, it does not mean that other areas should be neglected. Moreover, every phase is tagged with a proposed GDP and priority areas. First phase, low hanging Fruit (2 Years), the targeted GDP is US$ 400 billion and priority areas agriculture and tourism. Second phase, Short Term (5 Years), GDP target is US$ 600 Billion and priority areas SMEs and industry. Third phase, Medium Term (15 Years), GDP target is US$ 1.5 trillion and priority areas are industry and SMEs. Fourth phase, Long Term (26 Years), GDP target is US$ 3 trillion and priority areas are services, industry and SMEs.

The entry point will be agriculture and livestock, as we know there are the guarantors of sustainability of social and economic fabric of Pakistan due to its contribution to food security, livelihood opportunities and exports. Although the contribution of agriculture to GDP is low but contribution to labor employment is very high. Agriculture directly provides employment to around 40% work force but indirect contribution through textile industry, middleman etc. is very high. Besides, it also has the potential to give impetus to economy in short run due to its multifaceted contribution to economy and society. The improvement in agriculture sector will provide relief immediately and help to build the economy in long-term.

However, government will have to adopt dual edge policy for agriculture. On one hand government will have to focus on the growth of the sector. On other hand development must be the focus of the policy. The proposed strategic interventions would be land reforms, supply chain management, interest free financial resources, establishment of food processing industry, inclusion of private sector and diversification.

Tourism is another area, which can help Pakistan in short run. Pakistan has immense potential, as Pakistan has been blessed with rich natural venues, historical and religious site. Recently number of international organizations kept Pakistan among the top destinations for tourism. Besides, Pakistan can also benefit from the rising tourism market of China, as in 2018, around 150 million tourists from China visited world. Hence, a right and focused policy can help Pakistan to exploit potential. The proposed interventions for the sector are promote religious tourism, build partnership with China, introduce and promote eco-tourism, improve standards of services industry and improve infrastructure on war footings.

Small Medium Enterprises (SMEs) and Industry is the third and most important area, which will give sustainable boost to economy. Although the work must have been started from yesterday but still there is window of opportunity to exploit the potential of SMEs and industry. It must be “the priority” in short-medium term, otherwise we would never be able to realize dream of development.

However, before going for industrialization Pakistan needs to focus on three things. First, industrialization should not be tagged with private sector or mixed with privatization. Pakistan will have to ensure the participation and promotion of State-Owned Enterprises (SOEs) and create a balance between private sector and SOEs. SOEs are critical to sustain the national revenue and ensure welfare of the society. SOEs also help to create non-tax revue, which government can use for the welfare of people. Second, consolidate institutional work and make decisions on the basis of economic rational and minimize political or institutional interference. Third, encourage domestic investors, it will boost confidence of foreign investors.

Pakistan should start the process of industrialization by looking opportunities for the inclusion in the global supply chains. As, we know Pakistan does not have any brand, which can compete global brands, even in textile sector we do not have such brands. Pakistan mostly have to work as a supplier of international brands. It impacts the potential revenue of country. Further, Pakistan does not have any edge in technology like in hardware and software. In this context, the question is how Pakistan can enhance the export and give impetus to economic growth? The available option is inclusion in the supply chain of the recognized brands. Hence, it is suggested that Pakistan should devise and implement policy of supply chain inclusion. We can start from textile and agriculture commodities and move to high end products.

Second, there is no second opinion that Pakistan does not have good industrial base. Pakistan needs substantial investment to upgrade the industry to make it competitive in global market. Unfortunately, Pakistan’s industrialists and business community does not have such financial resources. Moreover, government of Pakistan also does not have financial resources to support them. Hence, in this scenario joint venture with priority of domestic industry would be a good choice.

Lastly, Pakistan should look for an anchorage country to give sustainable support to Pakistan. Fortunately, due to China-Pakistan Economic Corridor (CPEC), China has emerged as anchorage country for Pakistan. Thus, Pakistan should work to make CPEC a success story and turn it into an opportunity to revive the economy in short-run and achieve the Economic Agenda 2047 and sustainable development.