How to address current economic needs of Pakistan?

There is an impression among economists and the public that the current economic framework of Pakistan is dysfunctional and needs to be reformed

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Pakistani politics and global dynamics have greatly affected country’s economic situation which is in dire need of restructuring the economic framework. There is an impression among economists and the public that the current economic framework of Pakistan is dysfunctional and needs to be reformed.

Economic upheavals have negatively impacted business community at large. Various business associations, particularly chambers of commerce and industries, are trying to identify economic reforms that all stakeholders can agree on and that can continue regardless of the change of governments in the future. In this regard, they are also trying to get the support of major political parties besides getting the opinion of experts.

Read more: Pakistan: A country caught in complex economic downturn

However, economic crisis were not only faced by Pakistan, it was a global phenomenon but all the countries dealt with them in different manners, some succeeded and others still lag behind. Effective economic reforms played a major role in those countries to deal with the economic problems.

If the world can do it, Pakistan can also ace it. Deep-rooted economic problem of the country is static exports which leads to numerous other problems such as lack of dollar inflow. Pakistan’s share in global exports is decreasing at the rate of one and a half percent per annum. When India and Bangladesh exhibited a positive growth in their exports, Pakistani exports declined by 24 percent in July as compared to the exports registered in June 2022.

Read more: Pakistan’s trade race with India and Bangladesh!

It is of no surprise that the country has persistent trade deficit as it has a consumption-driven economy heavily reliant on imported goods.

Moreover, low literacy rate is a constant problem in Pakistan which hinders the prosperity of export sector as it fails to bring innovation and adapt to the rapidly changing technologies.

According to the Economic Survey of FY21, Pakistan’s education budget was just 1.77 percent of GDP, which is less than half of the global average.

Another major problem is the capture of resources by the elite class, due to which public resources are diverted to the interests of a few. Inequality is a common problem of developing countries like Pakistan, be it gender or income, but inequality is persistent.

According to UNDP’s 2021 report, Pakistan’s influential class is receiving economic concessions worth 17.4 billion dollars. To increase exports, we must expand our global and regional relations. Apart from this, taxation and trade policies will have to be reformed.

To increase the literacy rate, share of education in the budget should be increased and attaining education should be made feasible for all, regardless of their income class. Technical education should be given special attention. Moreover, the influential class will have to lose the economic privileges enjoyed by them at the expense of common citizens being over-burdened.

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