TIME TO SHOW CONFIDENCE IN PAKISTAN ECONOMY

THERE ARE PROBLEMS BUT MOST OF THESE CAN BE RESOLVED IF ALL THE STAKEHOLDERS SHOW THEIR COMMITMENT

SHABBIR H. KAZMI
Feb 18 - 24, 2008

There are growing fears that Pakistan economy is heading towards recession. This may not be true but there are ample evidences that the country would not be able to achieve the GDP growth target fixed for the current financial year. It will not be due to any alteration in economic fundamentals but due to the election fever. Not only that some of the policies could not be altered by the caretaker government but wait and see policy of the business community is delaying commencement of work on some mega projects.

Elections scheduled for 8th January had to be postponed till 18th February due to the assassination of Benazir Bhutto.

In the aftermath assets worth billions of rupees were torched within couple of hours. All economic activities came at grinding halt. The businesses opened after three days mourning on but there are still daunting memories and economic activities have not come back to normal.

By the time you get the chance to read this issue, balloting would have been over and results announced. Holding of election on the announced date would certainly be a morale booster but most of the people are concerned about post election disturbance. The concerns are because all the leading political parties have started announcing the number of seats they expect to get in the election. However, it is almost impossible because each party is giving exaggerated numbers.

People have started to believe that installation of the next government is not far away, unless certain elements spoil the show. The positive point is that all the major political parties are participating in election except APDM and people are also taking interest. One has to trust to the words of President Pervez Musharraf that he is committed to holding free, fair and transparent elections in peaceful environment.

In any democratic society political parties accept their defeat with open hearts and try to come up to the expectations of voters in the next election. Ironically, the political parties in Pakistan failing in getting the desired seats always accuse the government for rigging but never try to probe the reasons for not getting enough votes. Whether they like it or not Pakistani political parties must learn the lesson from rise and fall of Congress in India. It has lost many elections but always won the subsequent ones. The other point is that Sonia Ghandhi never insisted on her nomination as Prime Minister, rather she proposed the name of Manmohan Singh.

Though, there is still are ifs and buts the expectations are that the elected government would continue the policies announced by the Shaukat Aziz government. Therefore, most of the local business houses and foreign investors are still bullish about Pakistan. However, most of the analysts believe that apart from credibility gap the next government would faced some serious issues. These include containing inflation, boosting GDP growth rate and restoring competitiveness of the local manufacturers.

The biggest issue is to ensure uninterrupted supply of energy at affordable cost. At present the country is enduring load shedding of electricity and gas despite paying relatively higher price. Higher interest rates are also contributing towards cost of doing business. Entrepreneurs may have consented to pay higher tariff but announced as well as unannounced load shedding has become unbearable. It is feared that if the situation persist for long some of the business houses may not survive.

The government as well as the business community is facing credibility gap, the loss which could hardly be recovered. The damage caused to Pakistan's image abroad is perhaps irreparable and investors' confidence is touching the rock bottom. If the local entrepreneurs are shy in investing, how can the country expect to receive foreign investment? All the stakeholders must keep in mind that foreign capital is like migratory birds, which are always in search of safe havens.

Doubts about the country's stability and security are having a toll on exchange rate, stock and other markets. Political instability is affecting the credibility of exporters as their capacity to deliver is being questioned. Efforts made in the past to bring Pakistan's economy into the main stream are being frustrated

Therefore, all the necessary measures should be taken without failure to save the nation from paying a heavy economic price for the years to come. If the government is serious in saving the nation from the huge losses the item one on its agenda should be bringing back the country to normalcy as early as possible. In this endeavor all the political parties should help the government and the first step is to accept the outcome of polling with open heart.

People of Pakistan in general and political leaders in particular should keep their eyes and ears open. They must not forget that various conspiracies are being prepared outside Pakistan and supported by some of the locals to cerate anarchy in this country. All such efforts have to be frustrated by showing unity and identifying the culprits.

Pakistan first, should not be taken as a cliché but the ultimate objective of all the Pakistanis. Anywhere and everywhere we go, our only identity is Pakistan. Therefore, it is our collective responsibility to try to make this country prosperous and not to allow any alien to destroy the peace.

Though the government machinery claims that Pakistan is capable of meeting all sorts of eventualities experts are of the view that some of the tangible losses could be recovered in the near future but recovery of intangible losses is just impossible. The economic mangers are behaving like novice when they say that the country can make up for the losses in the months and will be able to achieve the budgetary targets set for the year.