News Analysis: Pakistan's new gov't vows to strengthen economy amid major challenges

Source: Xinhua| 2018-09-11 19:35:16|Editor: xuxin
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By Raheela Nazir

ISLAMABAD, Sept. 11 (Xinhua) -- The newly-elected government of Pakistan led by Prime Minister Imran Khan has expressed its firm resolve to strengthen the country's cash-strapped economy and pledged to get it back on track during its five-year tenure.

In his first speech to the nation after being elected as prime minister, Imran Khan said that Pakistan is in the worst economic condition, vowing to take measures to relieve the strain on the economy by tackling the country's foreign debt, which is over 95 billion U.S. dollars.

"Without a vibrant economy and strong economic base, it might be difficult for us to deliver. The top-most priority is a strong economy," National Assembly Speaker Asad Qaiser told local media recently.

He said strengthening the feeble economy, reducing the burden of debt, developing the neglected sectors of agriculture and industry would be among the top priorities of the Pakistan Tehreek-e-Insaf (PTI) government.

As proclaimed in the PTI's economic agenda, the economy of Pakistan will grow at an average of more than 6 percent under its government. Inflation will be brought down to 7 percent from 12 percent and industry will grow at 9 percent, according to government's economic agenda, which further stated that the fiscal deficit will be brought down to 4.5 percent of Gross Domestic Product (GDP).

Prime Minister Imran Khan has legally formed an 18-member Economic Advisory Council which includes economic experts from Pakistan, Britain and the United States. The main purpose of the council will be to provide economic advice to the government of Pakistan, specifically the prime minister.

While showing their appreciation for the announcement of the economic plans voiced by the incumbent government, the Pakistani business community, however, has blamed various internal and external problems such as the law and order situation, energy crises, poor economic policies, corruption and the negative image of Pakistan around the world for the crippled state of the country's economy.

Hamyun Iqbal Shami, Chairman of the Pakistan Economic Forum Islamabad, told Xinhua that the present government has to take solid steps in the right direction by making results-oriented economic policies, without making any political compromises as previous governments had made.

He said, "Pakistan needs increased exports, rapid industrialization, high GDP growth rate and modernization of its agriculture sector, to boost its economy."

For that we need cheap and unrestricted supply of electricity. There is an immediate need to build dams which can be built quickly and cheaply as the agricultural sector, the second largest sector of Pakistan, accounting for over 21 percent of GDP, needs water.

He further added that "special economic zones (SEZs) should be established on a fast track basis. CPEC related projects and the relocation of Chinese industries in SEZs should be the top agenda of the government in order to uplift the country's economy."

Vaqar Ahmed, Joint Executive Director at the Sustainable Development Policy Institute, while talking to Xinhua, discussed various economic challenges the country is currently facing.

He said "balance of payments is a major crisis the incumbent government is confronting at the moment." According to the latest statistics, the deficit of over 18 billion U.S. dollars, 6 percent of GDP, is the highest deficit recorded in more than a decade.

"In the last five years, exports declined by 20 percent instead of increasing. Had we achieved normal 15 percent growth in exports, we would have earned 55 billion U.S. dollars every year and if we add remittances of 20 billion U.S. dollars, our balance of payments would have been positive," he said.

Ahmed explained that "another major crisis is related to our budgetary deficits. The government should take serious measure to appropriate the tax to GDP ratio and collect at least 8,000 billion rupees (110 billion U.S. dollars) annually in taxes to keep things in order."

He added that "the government should fix the dollar-rupee parity at 120 rupees. Taking this step alone can generate at least 20 billion U.S. dollars which has been kept in lockers and houses by people hoping for further increases in the value of the U.S. dollar."

Female Pakistani entrepreneurs have pinned high hopes on the current government's development agenda and have shown unconditional support for its endeavors to transform the national economy.

"All female entrepreneurs agreed to the developmental agenda of Imran Khan who will put the country on the path to progress and prosperity," President of Islamabad Women Chamber of Commerce and Industry Samina Fazil said in a statement.

Local economists and analysts are of the view that the target set by the incumbent government can be achieved with a qualified economic team, smooth coordination among ministries and wise and quick decisions to deal with the immediate crisis.