[image: Pakistan May Become a $2 Trillion Economy in Coming Years: WorldBank | propakistani.pk]6ISLAMABAD – World Bank’s latest report suggests that with sustainedeconomic reforms, Pakistan can become a two-trillion-dollar economy in thenext 28 years i.e. when Pakistan is 100 years old.
While sharing the main findings of the report, World Bank (WB) CountryDirector Patchamuthu Illangovan, said that currently, the country’s economystands at $275 billion; but it may jack up to $2000 billion if Pakistanmanages steadfast reforms in the coming decades with control on itsbirthrate.
“The $2 trillion economy means an upper middle-income country where percapita income will be $5,702, but it will have to halve its populationgrowth rate to 1.2% by 2047,” he added.
WB country director also maintained that with the usual business, the sizeof Pakistan’s economy will be only $1 trillion ($2110 per capita income). Thecountry’s population will also rise to 376 million at the current growthrate by 2047, he added.
Following are the factors that, according to the World Bank report titled‘Pakistan@100: Shaping the Future,’ may put Pakistan among theUpper-Middle-Income Countries by 2047, when it turns 100 years old.A $2 Trillion Economy?
The international lending bank has articulated the reforms Pakistanrequires to accelerate and sustain growth, and boost shared prosperity forall.Invest in Human Capital
The WB argues that Pakistan’s greatest asset is its young and growingpopulation of 208 million. The report highlights that the country caninvest in its young generations, especially in the children by giving them,medical attention, an improved education system, and higher wages toincrease their productivity.
Population Growth:
Pakistan is currently the second fastest growing country in Asia, afterAfghanistan, with a birthrate of 3.7 which poses a threat to overwhelmeducation and health services that are already overstressed. To implementthe recommended reforms, it needs to drop down to 1.2 by 2047.
Child Development Program:
The country needs to improve its health facilities, especially for pregnantwomen, newborn and infants including immunizations, deworming andmalnutrition treatment.
Transform Economy
Country’s economy heavily depends upon the investment from both the privateand public sectors. The direct foreign investment is also a critical factorin the economic growth of any country.
Ease of Doing Business:
Currently, investors in Pakistan go through 10 procedures to start abusiness, which is why Pakistan ranks at 136th in Doing Business Rankings.According to the WB report, it needs to come down to 25th place in the nextthree decades to meet the target.
For this purpose, Pakistan needs to simplify the regulatory procedure byintroducing a paperless online approval and web-based regulatory governance.
Moreover, the country needs to provide a level playing field for allenterprises (small and large) to get the maximum benefits. A friendlybusiness environment for SMEs (small and medium enterprises) is necessaryto boost the middle and upper middle-class.
Trade Openness:
Pakistan’s trade only contributes 26 percent to the country’s GDP. This isin contrast to an average of 47 percent among the Upper-Middle-IncomeCountries.
As the country’s trade stood only at $18 billion in 2017, it has to growmore than three folds to $58 billion by 2047.
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To achieve this target, Pakistan needs to liberalize the trade. It mayadopt a transparent and straightforward tariff structure to start with andintroduce duty exemption schemes to facilitate the traders.
The country also needs normalized relations with the South Asian countriesincluding India.Physical Capital Accumulation
History divulges that four influential factors have controlled thecountry’s policies. The industrialists and landowners are the ones who havealways used their influence to oppose reforms that could have enhancedtax-revenue collection from agriculture and the private sector.
Taxation:
To make Pakistan a trillion-dollar economy, the tax net needs to broadensignificantly. As of now, the country’s tax revenue is the only 13 percentof its GDP. It needs to touch the 20 percent mark to bring Pakistan amongthe Upper-Middle-Income Countries which average 21%.
To achieve this target, the government needs to broaden its tax net toagriculture and other tax-exempted sectors as well. It also requires anoverhaul of the tax-collecting department and efficiently identify thenon-filers, track & trace in high-risk sectors and improve the taxadministration. The tax policies should also be revised to bring in betterfederal-provincial integration.Protect the Environment
Pakistan@100 strongly suggests a sustainable environment for a sustainedeconomy. This is only possible when the natural resources like water arejustly utilized.
Water Management:
The industrialists and the landowners use a lion’s share of water in thecountry. These influential factions use water for commercial purposes andcontrol the policies for water pricing – the reason why Pakistan’s waterproductivity still reels at $1 per cubic meter in comparison to East Asianand Pacific countries average of $17.
The country needs to take steps to regulate water pricing for commercialusage and encourage the water saving by cautious usage and dams.Improve Governance
Good governance is one which has transparency in its affairs and is openfor accountability.
Transparency:
In contradiction with the past, the future governments need to providetransparent access to the public towards the accessible information onbudget documents, audit reports of State-Owned Enterprises and details ofpublic spending, etc.
Accountability:
At first, the country demands a robust Local Government System to devolvethe administrative autonomy, finances & expenditure responsibilities. Whenthe power reaches to the masses (where it belongs), the service providers,the politicians, public officials, and the policymakers may be heldresponsible for not delivering to their promises and for not meeting thepublic expectations.
The incumbent PTI government and the governments to follow must follow therecommendations laid by the Washington-based lending agency to become astable economic power- as the decisions over the next decade will determinethe future of Pakistan in coming decades.
*Via: World Banklink*
