December 10, 2018 (MLN): From time to time, the government of Pakistan continues to express its wish list, stating that they will pursue self-reliance as a policy guideline.
However, in reality the situation is just the opposite.
Pakistan is a vibrant country of around 200 million direly wanting to become a developed state.
The Minister for Finance and Revenue has recently said that after three years Pakistan will emerge as a self-reliant state.
Pakistan has weathered severe economic storms in the recent past, and, coupled with challenges on the political and international fronts, our economy has been hit.
Unfortunately, Pakistan still has not succeeded in building its own resources that a country can rely on.
Commodity producing Sector Growth
Since most of Pakistan’s population lives in rural areas and is related to the agricultural sector, the slow growth in the agricultural sector reflects the need to move from the “business as usual” concept to “innovation”.
Unfortunately, we are a debt-ridden society. Our annual recurring budgets and ADPs, by and large, depend on debts. This has pierced the spirit of self-reliance.
On the fiscal front, during the month of July to September FY19, Pakistan’s fiscal deficit stood at 541.7 billion, which is 1.2% high as compared to the corresponding period previous year.
Moreover, to finance this deficit government is dependent upon the external sources, Pakistan’s external debt grew by USD 1.394 billion in the first quarter of the new fiscal year to USD 96.735 billion compared to USD 95.342 billion on June 30, 2018.
The Debt figure grew by USD 11.112 billion compared to the corresponding period from last year, an increase of 12.98%.
Pakistan’s Total External Debt Trend
There is a need to reverse this trend through a will power so that the government can tighten its belt and introduce revolutionary measures on Financial Management front to achieve the much-coveted goal of self-reliance.
The government is expecting that CPEC will make the bumpy road to country’s self-reliance smooth.
The project will also increase Pakistan’s production, revenue, defense capability, internal security, political strength, international image and sustainable development.
It has become imperative for Pakistan to pursue a policy of self-reliance in meeting its essential economic and financial needs. Self-reliance does not mean a policy of self-sufficiency or cutting the nation’s links with the rest of the world. This basically means that Pakistan would have to learn to live within its own means.
This in turn would require austerity at the national level so as to raise the national savings rate to above 30% of GDP through appropriate economic and taxation policies.
In addition, measures should be taken to increase the tax-to-GDP ratio to 15%-18% and to reduce non-development expenditures.
There is no doubt that to narrow the gap between income and expenditure should be prioritized, but there is also a dire need to seek a judicious balance between growth and macro-economic stability.
It is fervently hoped that all stakeholders, including the government of Pakistan, should give serious attention to the aforementioned suggestions so that Pakistan can embark on the path of self-reliance to ensure economic sovereignty of our country, to achieve prosperity across the board and ensure rising image of our country. The sooner this is done the better.
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