Existential Economic Crisis of Pakistan

EXISTENTIAL ECONOMIC CRISIS OF PAKISTAN
2023
NAME: MUHAMMAD ABID

DEPARTMENT:
DEVELOPMENT STUDIES
UNIVERSIITY OF
PESHAWAR
EXISTENTIAL ECONOMIC
CRISIS OF PAKISTAN
Pakistan stability increasingly depends upon the outcome of political and

economic stability. Amid surging inflation breaking the record of past 50 year’s history,
and political uncertainty regarding the political future of Pakistan. As government has
intended for the care-taker setup in upcoming month of August, but still there is
uncertainty because of differences in the opinion of the government factions. Whether
to dissolve the assembly or to extend it duration for one year. The later may lead to the
huge political chaos. In this regard Mr. Zardari and Mian Muhammad Nawaz sharif have
agreed that the assembly to be dissolve in august, to ensure the conduction of Election
in due time. A meeting was arranged in this regard in Dubai in which Moulana Fazl Ur
Rehman was not invited by either of the two sides. Later on, Moulana expressed serious
reservation during the press conference after which Mr. Sharif had to call him to the
Dubai for meeting.
In this sensational situation when the political and economic chaos goes on rising. Meanwhile
the assistance of 1.2 Billion $. That were due to be release by IMF in Nov, 2022. It get failed
after review due to unfulfilled commitments of the previous government. The 1.2 Billion $ part
of 6.5 Billion $ of bail-out package was crucially needed to stabilize the dwindling foreign
reserve and to release economic assistance from different bilateral and multilateral donors.
The existing economic system in Pakistan is ineffective. A basic set of economic reforms that
can be endorsed by all parties and on which work can be maintained regardless of any future
changes in government is being sought by business organizations, notably the chambers of
commerce and industry.
The main source of Pakistan's economic issues is its sluggish exports. Over the previous 15
years, Pakistan's proportion of global exports has decreased by an average of 1.5% year, while
that of the rival nations has increased. Pakistani officials attempt to impose import restrictions
in order to control the trade imbalance, and dwindling foreign exchange reserve although doing
so impedes economic progress. Our economy depends mostly on the import of raw materials,
and politicians have never been very interested in import substitution measures. Hundreds of
millions of people in our area have been pulled out of poverty as a result of changing trade
policy.
The poor literacy rate is the second biggest barrier to progress. A foreign economist named
Charlie Robertson has made some quite significant comments regarding Pakistan's literacy issue
in this publication. “No illiterate country has ever achieved prosperity," he asserts. To
industrialize, a country needs between 70 and 80 percent of its population to be literate, as is
the case in Bangladesh and India is over 75%. Compared to that, ours is 62%. We won't catch up
to where our neighbors are now for at least 10 years. I think may be even for upcoming 3-4
decades. The government has only budgeted 97.098 billion rupees for education, a 1.5 percent
decrease from the previous fiscal year. It covers expenditures on elementary, secondary,
higher, and skill-based education.
The 'elite capture' issue, which denotes the misallocation of public funds for the benefit of a
select group of people, institutions, or businesses (including state-owned firms), is the third
biggest issue. The economic privileges of Pakistan's elite groups are estimated to be worth
$17.4 billion, according to a UNDP analysis from 2021. As a result, less than 1% of the nation's
$43 billion in total revenue, or 40%, goes to these privileged elite groups. The capacity of
common people to obtain resources and raise their earnings is significantly hampered by this.
Similar issues have plagued many emerging nations, but they have mostly been resolved.
Here is the recommended course of action for the three regions.
We must remove our isolation and deepen global and regional interaction if we want to
enhance exports. Domestic changes to taxation and trade laws will be necessary. The potential
for service export is enormous. Exports of IT have recently increased by about 25% yearly.
There is no reason why we shouldn't be able to increase exports from the present $2.6 billion
to $10 billion if this momentum continues over the next five years.
Secondly, the existing pitiful budget will need to be at least quadrupled in order to raise the
literacy rate to the same level as other regional nations. At least we need to allocate our 4% of
GDP to Education and research equivalent portion to that of Indian ratio of GDP to education.
This severely limits the ability of ordinary people to access resources and increase their
incomes. Many developing countries have been through similar problems but have managed to
largely overcome them.
Here is the suggested way forward for the three areas.
Boost exports, we will have to end our isolation and increase global and regional integration. It
will require domestic reforms of taxation and trade policies.
The majority of the newly allocated cash should go towards improving technical education and
skill development.
By removing the exclusions made possible by different policy measures, such as SROs
(Statutory Regulatory Orders), Pakistan may greatly lessen the elite capture. The allocation of
land to the wealthy, the funding of certain industries, and the shielding of the wealthy from
taxes must all be stopped. Any revenue over a particular amount, whether it comes from
agriculture or another source, is subject to taxation. Similarly, all industrial sectors and
economic activity have to be treated on a same footing. Regulations shouldn't be as heavily
relied upon as market forces.
So all these measure will tackle the economic crisis to a great extent. If government is willing to
implement it.

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EXISTENTIAL ECONOMIC CRISIS OF PAKISTAN

NAME: MUHAMMAD ABID

Pakistan stability increasingly depends upon the outcome of political and

Here is the recommended course of action for the three regions.

Here is the suggested way forward for the three areas.

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