The economic model of Pakistan has come under scrutiny, with MathewVerghis, the Regional Director for South Asia at the World Bank (WB),expressing serious concerns about its sustainability. During a ceremonyheld in Islamabad, Verghis emphasized the pressing need for urgent reforms,highlighting the adverse effects of a growing fiscal deficit and currentaccount deficit, primarily driven by high expenditures.
These imbalances have resulted in an alarming accumulation of debt, makingPakistan’s economic trajectory unsustainable.
In addition to fiscal challenges, Verghis drew attention to themultifaceted difficulties facing Pakistan, ranging from economic strugglesto a quiet yet substantial human capital crisis. He noted that thecountry’s economic model has become obsolete, demanding immediate reformsto address these issues effectively.
One particularly concerning aspect was Pakistan’s low ranking in the regionin terms of gross domestic product (GDP), highlighting the urgency of thesituation.
Verghis lamented that Pakistan was consistently spending more than itsincome, a situation that posed significant risks to the nation’s financialstability. Moreover, he underscored the escalating threats of environmentaldisasters, citing the growing impact of floods on the population. To combatthese challenges, Verghis stressed the importance of coordinated effortsamong all stakeholders, including government bodies, non-governmentalorganizations, and foreign donors, to pave the way for a brighter futurefor Pakistan.
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The World Bank representative emphasized that achieving economic recoveryfor Pakistan hinged on implementing immediate reforms. He argued that thecurrent economic policies were insufficient to ensure stability, and thecountry’s economic challenges were only growing. Verghis concluded byasserting that Pakistan could attain growth and prosperity, but it wouldrequire a modified and reformed economic system due to the inherentinstability of the current model.
It is worth noting that the Asian Development Bank (ADB) recently issued aneconomic outlook report for Asia, predicting a modest recovery inPakistan’s gross domestic product (GDP) growth. The report estimated thatPakistan’s GDP growth would increase to 1.9% in fiscal year 2023-24, upfrom a meager 0.3% in the preceding fiscal year, underscoring theimportance of timely reforms to bolster the nation’s economic prospects.