Is Promise of Rapid Economic Revival in Pakistan Realistic?
21:00 05.09.2023 (Updated: 11:40 06.09.2023) Subscribe
Dr. Gohar Ejaz, the caretaker minister for commerce and industries production, set a grand target of $25 billion in textile exports for the current year with a tight deadline. Some experts feel the agenda is non-viable considering the precarious state of the country's economy.
Dr. Gohar Ejaz held a meeting with the Pakistan Textile Exporters Association in Islamabad last Friday to outline his vision for the near future. During the meeting, the minister promised a prompt revival of all the closed industries in the country with a tight deadline of just one month.
The minister said that textile exporters generated $16 billion last year. However, this year the aim should be to surpass the target and achieve $25 billion in textile exports.
Dr. Ejaz expressed confidence in surpassing this milestone, assuring that each factory currently closed for various reasons would be reopened by September 30. The minister pledged to resolve all the issues and challenges that the exporters are currently facing within a month.
He further asserted his willingness to personally engage with all stakeholders, including industrialists. The minister asked his ministry to provide him with a detailed list of all the closed factories nationwide, along with concrete reasons for closure.
Lastly, the minister extended an open invitation to associations and business leaders, ensuring his availability to collaborate and find solutions to their problems
. Talking about the challenges such as gas, electricity, energy and fund disbursement, the minister vowed to resolve them, reiterating his commitment to fostering a thriving business environment in the country.
Some have suggested, however, that his goals are unrealistic. Pakistan's current challenges require concrete, long-term policy changes after the elections are held in order for the industrial landscape to be strengthened.
Too Good to Be True
"Poor governance and low productivity per capita in comparison with other low to middle-income developing countries have added to this balance of payment crisis in which the economy is unfortunately incapable of earning enough foreign exchange to fund the imports that it consumes," former Engro Corporation Unit Manager and financial specialist Dr. Shahid Rashid shared with Sputnik India.
Specialists like Dr. Rashid feel that the current economic crisis in Pakistan is the biggest since its independence.
"Low foreign reserves, a depreciating currency and high inflation have contributed to this scenario, as this week 1 US dollar is trading at 306.33 Pakistani rupees. It is highly likely that the depreciation will reach 500 Rs to 1 US dollar in the coming months. I would say that the country's distortive policy measures have slowed down economic activity which decreased drastically with policy tightening, flood impacts, import controls, high borrowing and fuel costs," the manager explained.
He shared that Pakistan's agricultural output is expected to contract for the first time in more than 20 years due to last year’s devastating floods
. Hence, all of the industries' output, including textile, is expected to shrink rather than grow because of the supply chain disruptions, higher borrowing costs and political uncertainty.
“It is simple economics. It is a matter of cause and effect. Words are not enough, actions are needed and long-term policy changes with implementation of new concrete policies which cannot be done by a short-term government, but rather by a strong, stable, elected leadership,” the specialist stressed.
Placating the Public for a Short-Term Solution
Director of UK-based Midstone Centre for International Affairs, Faran Jaffery, shared his doubts over the minister's claims of miraculous revival of the industries within a short span of time.
"I don't think such claims are serious, let alone realistic. We have to understand that this is a caretaker government which has no electoral mandate. Its only job is to ensure elections within due time. It is not answerable to the public the same way an elected government is. However, the dissatisfaction among the Pakistani public not just with the state of the economy but with the entire system has been steadily growing," Jaffery told Sputnik India.
According to the director, there have been protests and strikes across Pakistan against the enormous price hikes of late.
"There are reports of people committing suicide because they are not able to pay their bills. Millions of people are going under heavy debt. Such laughable claims from members of the caretaker government should be seen as a way to placate the public in the short term. Will it work? We don't know. But there's simply no substance to these claims," Jaffery concluded.