EDITORIAL
While countries far and wide find their economies rattled by coronavirus-forced lockdowns and job losses, Pakistan is reporting an array of bright indicators about its economic recovery under the globally prevailing pandemic cloud.
The latest statistics show Pakistan beat all gloomy predictions to chalk up a 3.94pc growth in the fiscal year 2020-21.
This has been possible “on the basis of a rebound in almost all sectors,” the Government’s most elaborate document on the state of the economy, known as the Pakistan Economic Survey, says.
The growth trajectory contrasts with last year’s contraction of 0.47pc after the pandemic hit the world economies from early 2020 after the coronavirus started causing the infectious disease later named as COVID-19.
So, how did the country, which was predicted to hit the modest target of 2.1pc growth by Islamabad and even lower threshold by the world institutions like the International Monetary Fund achieve this rebound?
Prime Minister Imran Khan has credited his Government’s policies. But experts say overall growth seems to have benefitted from both the government’s policies like smart lockdowns, the pandemic-induced growth in some sectors, and exports of protective equipment textiles – long a mainstay of the national economy.
A critical factor has been the inflows of record foreign remittances by overseas Pakistanis which narrowed the gap between the ballooning import bill and export earnings.
During July-March FY2021, export of goods grew by 2.3pc to $18.7bn as compared to$18.3bn the same period last year. Import of goods grew by 9.4pc to $37.4bn as compared to $34.2bn last year. Consequently, the trade deficit increased by 17.7pc to $18.7bn as compared to $15.9bn last year, the Economic Survey says.
Finance Minister Shaukat Tarin says industries and services led the growth momentum while the agriculture sector grew around 2.8pc exactly as per target. The industrial sector registered a growth of 3.6pc against a target of 0.1pc, while services grew 4.4pc against a target of 2.6pc.
A hopeful trend, according to the PES document, has been an increase in tax collection. The Federal Board of Revenue (FBR), which often faced criticism for its unsatisfactory performance, has collected Rs3,780.3 billion. The stats show an impressive double-digit growth of 14.4pc during July-April FY2021, in contrast with Rs3,303.4 billion for the same period last year.
In recent years, Pakistan has seen a mix of fortunes with heavy Chinese investments but stagnant exports, resulting in far from satisfactory growth to meet the development needs of its burgeoning population. The annual development expenditures have stalled while health and education sectors need massive investments to come anywhere near the universally accepted international standards.
Remittances inflows have been on the upswing (around $26 billion) sent by around ten million Pakistanis living around the world, which has been a bright spot. However, elevating exports through a targeted trade policy of commerce with Afghanistan, Central Asian states, India, China, Iran, the oil-rich Middle Eastern powers, and longtime friend the United States and the European powers is the desirable recipe for long-term economic recovery and growth despite the fact that a lot of geopolitical issues complicate such a smooth-looking scenario.
Sustained growth in the traditional and innovative agricultural fields and new sectors like information and communication technologies could be Pakistan’s economic surprises under the corona cloud and offer the Khan Government an opportunity to fend off political and public criticism against what are termed as less-than-proactive policies that some areas call for in the uncertain times. That way Pakistan could step up its quest to get back on the highway to progress through poverty alleviation and anchor its growth on fundamental pillars of human empowerment and across-the-board development.
