Pakistan’s economy has been in shambles for a very long time now. The quagmire of debts; the ever-rising inflation; the gigantic monster of Adverse Balance of Payment and the contracting industrial sector has been the emblem of our economy. Every election comes with the tall promises of the change in the status quo, but what changes are that our economy worsens. This has been going from the moment Pakistan gained Independence. But now is the chance to reconstruct the economy on solid grounds. One would wonder how one of the worst years for the economy –the year plagued by Coronavirus poses an opportunity for Economic turn-around for the country? There are solid reasons behind that.
As the World is still plagued by and striving hard to combat the menace of Coronavirus, Pakistan came out early from its clutches. We can be cautiously optimistic about the current situation of the Corona plague in our country. The ameliorated conditions not only saved billions of rupees from the national kitty that would have been consumed in fighting against the novel plague but also gave timely confidence for business activities to resume. Industries and Markets were re-opened with standard operating procedures (SOPs) defined by the government after a hiatus of almost two months. The resumption of trade and business activities provided the much-needed impetus to the slowing economy and Pakistan’s economy took a lighter hit as compared to other countries.
A big chunk of collected Revenues by our government is consumed in debt servicing. Pakistan has to pay billions of dollars every year to pay interest on the debts it has taken as well as pay back the installments of previous loans. The amount paid in debt-servicing is so insanely high that it even exceeds the defense budget of the country. That creates a wedge between the expenses and Revenues of the government. To bridge this gap, the government takes more loans and always remains trapped in the quagmire of debts. But owing to the Corona situation, the Bretton Woods lending institutions announced to forgo the accrued interest on their loans for the year. This announcement provided a sigh of relief for the debt-laden Economy of Pakistan.
Pakistan is amongst the countries that receive a lot of foreign remittances from their diaspora. These remittances provide a lot of support in appreciating the value of the currency. By Good luck, Pakistan received its highest ever remittance in the month of July. The pouring of these funds nudged our Balance Payment towards positive after so many years. Favorable Balance of Payment can be partly attributed to the contained development expenditures by the federal government due to the virus situation. But the very fact of favorable Balance gave great confidence to the people as well as the general public.
As it is said every cloud has a silver lining, the maxim proved right in the case of Pakistan’s economy during the Coronavirus situation. It has posed a golden opportunity for our government to take stern measures in order for our economy to sustain its current positive patterns. As of now, the joint session of Parliament has also passed the much-needed FATF bills, which would slay the hydra-headed monster of Money-Laundering and Terror financing activities in Pakistan. It should also save Pakistan from going into the Black List by Financial Action Task Force (FATF), which already warned Pakistan had it not taken strict actions against Money Laundering and Terror Financing. In addition to that after early riddance from the Corona Virus, Pakistan Stock Exchange has emerged as the best market in Asia. All these facts warranted that it is a high time to take Pakistan’s Economy out of shambles by concerted and concrete efforts of the Government.
Disclaimer: The views expressed in the article are the author’s own and do not necessarily reflect Dunya News’ editorial stance.