Govt finalizes SME focused economic strategy: SBP Governor

January 15, 2025 (MLN): The government has finalized an economic strategy highlighting the essential role of banks in financing Small and Medium Enterprises (SMEs) to boost the country's economic growth, as stated by Jameel Ahmed, Governor of the State Bank of Pakistan.

The aforementioned information was shared during a media conference, where Federal Minister for Planning, Ahsan Iqbal, alongside Ahmed, State Bank officials, and bank presidents, discussed the country's economic strategy.

Iqbal highlighted the importance of banks in the success of the government’s Uraan Pakistan program, noting that any program needs adequate resources to succeed, according to the media briefing.

Reflecting on the country’s post-independence development, he expressed concerns about Pakistan falling behind other nations, despite its past attempts at economic growth.

During a press conference he cited three past attempts at economic takeoff, all of which ultimately failed.

The first attempt in the 1960s was derailed by the 1965 war, the second attempt in the 1990s turned into a political game of musical chairs, and the third attempt in 2016 was thwarted by the 2018 political changes.

However, Iqbal mentioned that in April 2022, a collaborative effort between the State Bank and the government helped improve key economic indicators.

Iqbal emphasized that Pakistan's economic takeoff is still hindered by political instability and a dual deficit.

One of the major challenges remains increasing tax revenue.

He also pointed out that no successful country has a literacy rate lower than 90% and stressed the need to improve Pakistan's education and health systems.

Additionally, despite efforts to control population growth, it continues to rise at 2.55%.

The minister also acknowledged that rising energy prices are eroding Pakistan’s competitiveness on the global stage.

Iqbal shared that the government has outlined a plan based on five core principles, known as the five E's.

These include E-Pakistan, Environment, Energy, Equity, and focusing on society.

The aim is to raise exports from $30 billion to $100bn, which he believes will be the key driver of economic growth.

He highlighted that economic growth can be achieved through expanded expenditures and by increasing exports from 2.5% to 6%.

The financial sector’s role in boosting exports was underscored, with Iqbal mentioning that each bank has created special windows to facilitate the increase of exports.

He further added that SMEs could potentially contribute $40 to $60bn in exports over the next five years.

Iqbal also pointed out the significant role of agriculture, with Pakistan having become the largest exporter of sesame.

He stressed the importance of increasing exportable surpluses in agriculture and industrial development.

In addition, he identified IT, services, mining, labor export, the blue economy, and creativity as critical sectors for future growth.

The five E’s of the Udaan project also focus on building quality human resources, with the State Bank and various banks having introduced scholarship schemes for workforce development.

Furthermore, the minister proposed a laptop leasing scheme, like vehicle leasing, to enhance technological access and development.

Iqbal concluded by emphasizing that, individually, Pakistanis excel, but the country's collective efforts remain a weakness.

He expressed optimism that, with the right focus and collaboration, Pakistan will be able to keep pace with global changes and emerge as a success story of rapid development.

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