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The show goes on while economy goes down

The PTI and PAT dharnas at Islamabad have now escalated into jalsas being held in different part of Punjab. They are all set to soon embed their footprints in Sindh and Balochistan. PPP also decided to put up a show and had one in Karachi last Saturday. Other political parties are reported to be also tempted not to be left behind.

While the show goes on some serious challenges are brewing up in most parts of the country. We have military operation in the north and its fallout in all parts of the country, the displaced persons in KP, the skirmishes on the Indian and Iranian borders, the rehabilitations of flood-affected people.

But the most serious of all which has not yet surfaced in full vengeance is the ailing economy of Pakistan although its manifestation is noted in the unprecedented public presence in the political jalsas. The World Bank in its report of October 2014 on South Asia Economic Focus has presented a report containing reviews of the region and country-wise economic performance indicators of South Asian countries in 2013-14 and the outlook for 2014-15.

Economic growth in South Asia is forecast to accelerate to 2016 led by an increase in activity in India, the biggest economy in the region that has the world’s largest concentration of poor people, a World Bank report says. The biannually-published report said that the region’s economy will expand by a real 6% in 2015 and by 6.4% in 2016 as against 5.4% in 2014, potentially making it the second fastest growing region in the world after East Asia and the Pacific.

Pakistan is the second biggest economy of the South Asia region. But we are not where we ought to be. We are not well positioned to derive benefits out of the South Asia economic boom driven by recovering US economy providing export potential and private investors looking for investment opportunities in South Asia emerging economies.

Among the eight South Asian economies, all members of Saarc, Pakistan has the lowest GDP rate, the lowest export growth of 1% (Bangladesh 12%, India 7% and Sri-Lanka 13%), the second highest rate of inflation, the highest fiscal deficit, the lowest foreign exchange reserves import coverage of 2 months, the lowest foreign direct investment (FDI).

Pakistan’s Large-Scale Manufacturing (LSM) and agriculture, the two prime-movers of our economy have underperformed in the period 2013-2014. Future growth will increasingly depend on strong investment and export potential. Pakistan is missing out on both accounts. Further, the World Bank has also issued this month its 2014-World Development Indicators report. It states that in 2013 the World Bank Group announced that it would focus on two overarching measurable goals: ending extreme poverty by 2030 and promoting shared prosperity.

World Development Indicators 2014 provides a compilation of relevant, high quality, and internationally comparable statistics about global development and the fight against poverty. The eight Millennium Development Goals (MDGs) and indicators for monitoring progress are set as: eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality & empower women , reduce child mortality , improve maternal health, combat HIV/ Aids, malaria and other diseases , ensure environmental sustainability and develop partners for global partnership for development.

In the 188 World Bank member countries, Pakistan’s population is the fifth-largest in the world at 180 million people (2012) against the world population of 7 billion people, while, its per capita gross national income is the 40th lowest at 2880 US $(2012) against the world average of 12,200 US$/capita and South Asia average of 3500 US$/capita.

India, Pakistan and Bangladesh rank among the poorest countries in the world whose major population falls below international poverty lines of $2 per day. In Pakistan 60% population is at below $2/day (2008). In India 68.7% is below $2/day (2010) while in Bangladesh 76.5% population is below $2/day (2010).

In Pakistan 31% of the child population is a victim of malnutrition and underweight, in India it stands at 43.5% and in Bangladesh it is 36.8%. Alarmingly the deforestation in Pakistan is one of the highest in the region at an annual average of 2.24% (2000-2010), whereas, in India it is a healthy -0.41% meaning their green areas are increasing. Pakistan’s deforestation is a serious threat to the environment of Pakistan whose effect is visible in the freak and changed weather pattern we are lately experiencing with much life and property destroyed.

In Pakistan 91% of total population has access to improved water source and 48% has access to improved sanitation facilities. In Pakistan (2012-13) time required to start business is stated in the report as 21 days, stock market capitalisation as 19.4% of GDP, domestic credit provided by financial sector is 45.8% of GDP, tax revenue collected by central govt. is 10% of GDP, military expenditure is 3.1% of GDP, electric power consumption per capita is 449 kwh, mobile cellular subscription is 67 per 100 people, individuals using the internet are 10% of the population.

These figures benchmarked to the average in our South Asia region is stated to be 16 days to start business, stock market capitalisation is 59% of GDP, domestic credit provided is 71% of GDP, tax revenue collection is 10.6 % of GDP, military expenditure is 2.4% of GDP, electric consumption 605 kwh, mobile subscription is 69 per 100 people, individuals using internet are 12% of population.

The ground realities and the above data compiled by international sources underline the serious Economical and Social challenges the country is confronted with. The syndrome of Pakistan moving into political and economic uncertainty is a lethal combination which threatens the sovereignty of the nation. It needs to be arrested and arrested before it becomes unmanageable as the signs of the same appear to becoming apparent. Government is at standstill and more dangerous is the fact that the government in power and the other political prime movers all appear to be oblivious of the gravity of the issues the nation is confronted with.

Farhat Ali, "The show goes on while economy goes down," Business recorder. 2014-10-23.
Keywords: Economics , Economic issues , Economic system , Economic policy , Political crisis , Political parties , National situation , Economic growth , Foreign investment , Economy-Pakistan , PTI , PAT