LAHORE : The Secretary General (Federal) of the Businessmen Panel, AhmadJawad said further IMF package would put the China-Pakistan EconomicCorridor (CPEC) at stake because the IMF does not approve of the project inview of the poor health of the economy”.
He said economic managers were at their wit’s end on how to bridge theyawning resource gap in the external account and avoid going into defaulton repayment of the country’s debts.
Jawad said Pakistan needed $15-16 billion worth of support but the WorldBank, and bilateral credit from a consortium of donors would raise morethan half – $9 billion. “We will be left with a shortfall of around $7-8billion to bridge either through grants and assistance from friendlycountries or from the IMF,” he said, adding that the country’s economy was,of course, passing through a difficult period.
It’s more appropriate that Pakistan should to seek financial assistancefrom China, Russia and Saudi Arabia to get out of the grave financialcrisis it faces to bridge the country’s external account deficit ahead ofbudgetary proposals for the 2018-19 fiscal year.
He mentioned New Zealand and Kazakhstan are among other Asia Pacificcountries with smaller economies but more reserves than Pakistan.
Jawad said today, several key state-owned institutions like PakistanInternational Airlines (PIA), Railways, Pakistan Steel Mills, ZTBL, UtilityStores, Wapda (QESCO, HESCO, SEPCO etc) and other institutions are a majordrag on Pakistan’s economy.
“These loss-making entities are presently bleeding to the tune of Rs400billion per annum. Therefore, reforming these state owned institutionsthrough a combination of privatisation and restructuring is fundamental,”the PML-N Manifesto 2013 put on record a base to start with.
Despite having the resurgence of loss-making public-sector enterprises akey aspect of its 2013 PMLN manifesto, the performance of the party inpower has remained dismal.
The PML-N promised to initiate action to turn around the loss making stateenterprises by appointing independent and professional boards who in turnappoint competent CEOs of state enterprises.
The gap between what was said and what was done has pushed the country intoa deep debt trap, increased income inequality, and an increasing number ofquestion marks hovering over the economic outlook
“Professional competence and merit will be the only criteria forappointment of boards and CEOs. The immediate task of the boards and CEOswill be to manage these corporations effectively and to plug the losses,“In this regard a unique example of appointing a Chief Executive in TDAP,where the then Premier set aside the appointment criteria and evensuperannuation age and appoint 70 years old and dual national person in theauthority” That’s why country exports, which stood at $24.5 billion in June2013, have decreased to $20.42 billion as of June 2017
Similarly if we look in June 2013, the Public Sector Enterprises’ debt andliabilities were Rs495 billion. By June 2017, they had rocketed up toRs1.107 trillion, according to the SBP annual report. There was a net 123per cent increase in PSEs’ losses in just four years. This was primarilybecause the government did not settle the circular debt and parked hugesums outside the budget.
Jawad further told according to a report from the International Food PolicyResearch Institute, Pakistan remains near the bottom of the Global HungerIndex, standing at 106 among 119 developing countries ranked. If we lookinto agriculture sector we got to know that our country’s agriculturalsector has three major roles in the national economy: provides food toconsumers and fibre to the industry, earns foreign exchange, and provides amarket for industrial goods/machinery.
However, the share of agriculture in gross domestic product (GDP) hasdeclined since independence, falling from 53 per cent in 1949-50 to 19.8pcin 2016-17. Pakistan’s agricultural performance has been poor in comparisonwith neighbouring India, which has conditions similar to ours.
“We’re lagging behind the Indian Punjab though the condition of soil,climate and other factors is almost same,” he says. “Similarly, we havelarge produce of citrus and milk and many multinational companies in thedomestic market, but we couldn’t translate these factors into the export ofprocessed or value-added by-products of the farm produce in the last fiveyears.
Ye in five years Commerce Ministry failed to revive and restructure thePakistan Horticulture Development & Export Company (PHDEC) to supporthorticulture exports, if they did timely today these non-traditionalproducts could support country exports at a comfortable level including wefailed to launch a comprehensive food policy in last five year andcontinuously ignore the climate change process which will hamper ouragriculture sector at most in the coming years.
Jawad also viewed Government supposed to expedite four key structuralreforms in taxation, energy, public sector enterprises and thereorientation of the Ministry of Finance and other economy relatedministries well time before to benefit from emerging regional blocks underOBOR and CPEC.
He advised Pakistan has a sea of about 1,050 kilometres along the Makrancoast with larger Exclusive Economic Zone and continental shelf. Thesemaritime spaces offer myriad of prospects for Pakistan to exploitocean-based living and non-living resources which can give a good buzz toour economy if the policy makers look in it.