The Asian Development Bank, in its report the Asian Development Outlook 2018, cautions that the pace of growth of Pakistan’s economy may slow down to 5.1 percent as fallout of the growing external account challenges. The report projects the expected growth in the country’s gross domestic product at 5.6 percent on strong prospects of the large-scale manufacturing sector and recovery of the agriculture sector for the second year in a row. But difficulties in the balance of payment problem could outweigh the improvements in supply-side. The bank praises the ongoing infrastructure investments under the China Pakistan Economic Corridor which would strengthen economic growth, revive exports, improve power supply and contain inflation despite twice increase in the oil prices. The bank also expects the Pakistani government to maintain a stronger growth trajectory through domestic and regional stability, competitiveness, revitalization of the public sector enterprises and completion of the infrastructure projects within the time frame. The rising current account deficit could pose a challenge to the financial sector, but improvement in export sector would ensure the brighter economic prospects. However, the bank still suggest ‘greater exchange rate flexibility,’ which shows the bank is very particular about its own interests and has nothing to do with the improvement in the Pakistani economy.
The government will have to introduce structural reforms in every sector of the economy and devise a new standard operating system to not only improve administrative affairs, but also enforce industrial compliance with quality control and better its position in the global ease of doing business index. The official rigmarole is the biggest enemy of Pakistan which is adding further woes in business, trade and investment. The government departments will have to work in tandem and improve coordination among them. It appears the officials are incapable of doing anything positive or they are not taking interests in the official business due to inherent lethargy. It is time the political leadership should also change its approach toward national affairs with a strong will to overhaul the entire government system. The large-scale manufacturing sector has somewhat leverage and say in the officialdom, but the small and cottage industry is soft target for certain government agencies. It is also important to note that the policymakers insist on exporting edibles such as wheat, rice, pulses and fruits which have more demand in Pakistan than abroad. Instead, Pakistan needs to better its position in export of value added goods.