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Challenges to economy

Challenges to economy

According to Country Director of the World Bank, Pakistan could face serious challenges to its economy in next decade due to lack of consensus on political issues. The official also praised the government for depreciation of rupee against dollar and recommended more flexibility in the exchange rate to move in the desired direction. Unfortunately, the policymakers in this country are susceptible to listen to the advices, recommendations and even dictation of the foreign donor agencies without using their own brain and abilities. Though the performance of Ishaq Dar, the erstwhile finance minister, was not up to the mark, his presence in the office deemed as a big hurdle in the way of depreciation of rupee and the country achieved macroeconomic stability to some extent. However, after he left the office, the depreciation of the rupee has changed the total outlook of the economy. The fall in the rupee value is in fact an admission by the government that it is not going to achieve any target during the current fiscal year and, rather, the economy is on the downward trajectory. However, the World Bank official is right in his assessment that next decade is crucial for the economy of Pakistan.

The present government of the Pakistan Muslim League-Nawaz has broken all the past records of the country by taking loans from every source which might have come to its way. As a result, the short term measures left the nation to face the long term consequences. In the absence of the desired rate of industrial production, the export sector incurred losses of billions of rupees in five years. If the government listens to the World Bank’s advice, another round of depreciation will bring nothing but disaster for the already frail economy. The bank is already considering revising growth rate targets in its report to be issued in a couple of months.

The country needs financial collusion and coordination among various organs of the state as well as within the provinces. There is a need to ensure availability of financial statements from private individuals as well as the corporate sector and public sector organizations for better financial management and enhancement of the tax base. The current financial infrastructure is poor and it needs special attention of the policymakers. The financial collusion also means documentation of all the financial transactions. And last but not the least, the policymakers do listen to the advices of the international financial institutions, but use their own brain when it comes to decision making in the financial matters.