100-Day Economic Agenda for the Incoming Government

The Pakistan Business Council (PBC) believes that notwithstanding the immediate and urgent challenges facing the economy, the foremost socio-economic need of Pakistan remains the creation of livelihoods for the 2-3 million people that reach the age of employment each year or are currently unemployed. This has to be the primary responsibility of any government and is the over-riding objective that shapes PBC’s economic agenda.
A market of over 200 million people provides domestic manufacturing and services industries the opportunity to gain scale and become competitive. With this advantage, Pakistan can reduce its reliance on imports and find markets for value-added exports abroad. A new government must not fall for the temptation of managing the short term and neglect addressing the fundamental flaws that lead to recurring crises. Pakistan has been to the IMF on 12 occasions in the last 28 years. A clearly articulated and implemented “Make in Pakistan” policy will address some of the fundamental fault lines in the economy.

Essential enablers of scale and competitiveness are: well aligned government policies that support business to create jobs, exports and import substitution; energy at regionally competitive costs; realistic exchange rates; smartly negotiated (or re-negotiated) trade agreements; level playing field with the informal sector; more equitable and broader tax base; tariffs that promote manufacturing over commercial imports; fiscal policy which facilitates capital accumulation and consolidation; tax rates which encourage more transparent corporate structures over unincorporated entities; significant improvement in ease of doing business; upskilling and rapid growth of the digital and knowledge economy. Pakistan’s agriculture, livestock and dairy potential is vast but yield and quality are below global standards. Current government policy of support prices has seriously hampered the global competitiveness of Pakistan’s agriculture sector. Government policies have denied farmers adequate returns and industry, the key inputs for value-addition and exports. Climate change and depletion of water are already impacting Pakistan severely. Addressing these are essential for life, not just the economy and require a very focused and determined approach.

That said, an incoming government will need to manage the external account and the fiscal deficit. Painful, as it may be, an IMF programme is unavoidable. The government and the opposition should unite to use it to address the fundamental flaws that have seen manufacturing’s role in the economy decline, Pakistan loose share of world exports and import reliance grow to an unstainable level. Worse still, we have exported jobs and created the basis for social discord.

PBC’s 100 Day Economic Agenda has been developed to guide an incoming government to set Pakistan on a strong and sustainable growth trajectory. It has deliberately been kept concise and directional in nature and confined primarily to key actions to kick-start the economy. The PBC recognizes that business can only thrive in an environment in which important factors such as education, skills, health care, water, sewage and waste disposal and law and order conditions are supportive of business. However, it also accepts that there are organizations and stakeholders who are better placed to comment and contribute more extensively on these matters. Two aspects that every citizen of Pakistan must accept and address are the urgent and connected needs to reverse the impact of climate change and preserve the dwindling water resources.