SDG 17 is “Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development” and according to UN Department of Economic and Social Affairs for Sustainable Development, the global Debt of developing nations threatened the advancement that the world has had in rehabilitating poverty elevation programs. In 2021, Net ODA reached US $ 177.6 billion. Foreign Direct Investment around the world was US $ 1.58 trillion, and world remittances reached US $ 605 billion. During the Pandemic internet access around the world also accelerated substantially due to online teaching and business activity worldwide.
In 2022 Pakistan’s GDP growth rate was at a dismal 2.2%, the unemployment rate is 6.5%, the inflation rate in the country is 23.5%, the Rupee – Dollar parity is Rs. 224.5 to one US $, the FDP to Pakistan is US $ 0.95 billion, the portfolio investment are minus US $ (-) 30.0 billion, the trade deficit is US $ 27.8 billion, and the Balance of Payments Current Accounts deficit is US $ US $ 13.17 billion and the foreign reserves of SBP in December 2022 are only US $ 6.72 billion. Pakistan’s Public debt has reached Rupees 42.4 trillion (US $ 188.44 Billion) in end of 2022. The World Bank has projected Pakistan’s debt to Gross Domestic Product (GDP) ratio to 90.6% in current fiscal year 2022-2023. Pakistan’s GDP stood at US $ 346.34 billion (or Rs. 78 trillion).
In other words, Pakistan has only 9.4% (Rs. 7.3 trillion or US $ 32.55 billion) of its GDP as its own resource and then the question can be asked with foreign exchange reserves at US $ 6.7 billion, out of which US $ 6.0 billion are parked by Saudi Arabia and China, the country’s public debt as 90.6% of GDP and BOP deficit at US $ 13.17 billion and FDI diminishing to US $ 0.95 billion and portfolio investment at minus US $ -30 billion, what part of the economy is sustainable for its present generation, leave aside its future generation that are mostly uneducated and unskilled and lacks labor productivity in the real sense.
In order to become economically sustainable, the country will have to re-think its economic policy, especially its foreign policy and its international economic relations.
The first priority for the government of Pakistan is to re-negotiate the major portion of its public debt. IMF has over and over again advocated the sale of Pakistan’s public assets where almost all governments of the country have failed under domestic political pressures and every year the government dishes out millions of rupees to sick private sector units as well as to all public sector institutions that are in the red and have become ‘white elephants’ to the fiscal budget of the country and therefore a burden on the tax payer who cannot bear this excess burden any more. Selling its sick units to pay back a portion of its debt is one solution. Negotiating the retirement of another portion of Pakistan’s debt by our international partners is another solution to the issue, with a promise that the money thus saved would be spent on the education and training of its future generation into skills that can sustain them and the economy in the future where IT technologies and other such skills are needed for earning a sustainable living. A small but efficient government is the solution to this problem.
It should be remembered that the promise of transfer of modern technologies through direct investments from firms of industrially advanced nations to developing countries was part of WTO negotiations and agreement. Now is the time that government of Pakistan should allow FDI in tourism, energy and water resources, mining, agriculture, industry and service sectors etc. So that not only money comes into the country, but also technological, management and other such skills are imported through joint ventures that would create employment opportunities for young boys and girls as well as revenue can be generated through taxing enhanced economic activity. Competition should be promoted between our USA, EU and Chinees partners for better efficiency levels in the economy. The agreement of Reco Diq Mining is a classic example where it is a win-win situation for the federal government, the Baluchistan government, the labor of the area as well as our foreign partners under the agreement. We should have such partnerships in almost all sectors of the economy where we lack both expertise as well as investment opportunities because of inefficient domestic business and government behaviors.
The slogan ‘Trade and investment and not debt and dependency’ should be the guideline of the government of Pakistan in the economic field for sustainable economic development in the future. The government of Pakistan should allow Pakistan’s exports without export tax of any kind, so that our products can be cost-effective and competitive on international markets. All inefficiencies that hamper our exports should be removed and even small businesses should be allowed to export their products directly, without the help of middlemen or government employees in order to earn maximum dollars for the country.
Also sectors like energy and food should be promoted so that Pakistan can successfully replace foreign energy resources and cooking oil and other agricultural products with domestic production of these import substitutes that would save much needed foreign exchange for the country.
It should be noted that Pakistani’s working abroad, especially in Europe and the Gulf send to the country remittances to the tune of US $ 30 billion. It is suggested that the country should train its youth in skills needed by USA, EU, UK, Japan and the Gulf and provide these young people with international certifications to these skills so that our workforce can be exported abroad and then would be able to earn enhanced foreign exchange that can be sent to the country through official channels.
The education system of Pakistan, especially its school system is redundant and cannot cater successfully in training the children of Pakistan in productive for the world and local consumption skills. It is recommended to link these schools with international partners from the region and from the industrially advanced countries so that our children can be trained in tomorrow’s work habits and technologies as well as entrepreneurship for creating more and more startups.
All this needs a restructuring and revamping of our administrative, judicial and law and order system Reforms in all the sectors to remove burocratic bottlenecks would go a long way in reestablishing the economic imitative that Pakistan and its business community lacks at the moment in order to stem the downward trend of the economy and unsustainability of our international partnerships. World human right norms and environmental norms would have to be part of the economic package for foreign investors to revisit Pakistan’s economy. Lack of governance and transparency would not let Pakistan stem this downward trend. Immediate action is needed to correct things, dialogue between all stake holders – political and economic are an essential ingrediencies to this revival of the economy and the country’s international prestige.
Delay and bad governance would only lead Pakistan towards an economic dishevel and isolation towards a banana republic for any superpower to pluck the fruit of decay when the indicators are so bleak and unsustainable.
