ISLAMABAD – Pakistan Tehreek-e-Insaf (PTI), after forming federal government, would have to take extraordinary measures to bring out Pakistan from the current economic crises.
Discussions with economic experts revealed that competitiveness of Pakistan’s economy would take some time, as the government would have to do a lot for it. However, initially, the expected PTI led federal government would have to bring out the country from existing economic crises.
They said that government would have to approach International Monetary Fund (IMF) for bailout package to improve its balance of payment situation, which has deteriorated.
PTI’s economic wizard Asad Umar, who is likely to be next finance minister, has recently informed a foreign news agency, said that government would have restore the core competitiveness of the economy.
“The real issue is that the competitiveness of Pakistan’s economy has eroded badly – crop after crop, industry after industry has become uncompetitive,” said Umar, blaming low productivity and skill levels of businesses, high input costs, lack of scale, and political intervention in some industries.
However, economic experts said that new government would have to improve the economic situation. “The country is currently facing major economic crises. The newly elected government would have to bring basic changes by reducing the expenditures, building foreign exchange reserves, reducing gap between exports and imports,” said Dr Qaiser Bengali, an eminent economist.
In a first development, the newly elected government would go for the bailout package to improve its reserves.
After addressing these issues, the government should go for restoring competitiveness of the economy that need 20-25 years.
He further said that restoring competitiveness of the economy would need improving skill of the workforce and educating the people.
Bengali said PTI should improve the tax policy, which should encourage forming new industrial units in the country.
Dr Ashfaque Hasan Khan, another eminent economist and former Adviser to Ministry of Finance, said that no government in the past had inherited the economy in such bad shape. “The new government would have to introduce extraordinary measures to improve the economic situation”.
He suggested that PTI after forming its government should have good economic team, which could understand the economy of the country.
Khan explained that immediate challenge is the balance of payment situation, which should be addressed by reducing imports and increasing exports of the country. The PTI after forming new government should devise a plan to reduce the imports by $5 to $6 billion and enhance the exports by at least two billion dollars to reduce the trade gap.
Similarly, the government would go for resource mobilization, he added.
Talking about restoring competitiveness of the economy, Khan said that it would come after stabilizing the economy. However, he was of the view that improving competitiveness of the economy would take time.
Former finance secretary Dr Waqar Masood said that one of the major challenges for the new government would to address the external imbalance. “The new government will have to take measures to reduce the imports and building foreign exchange reserves”.
He also said that restoring competitiveness of the economy would take long term, as improving the skill labour and other issues could not address in short run.