The Phoenix: Pakistani Economy
In all of Greek mythology, one creature particularly stands out. Radiant and sublime, the Phoenix is a mythological bird that burns itself, only to resurrect from its own ashes. As a powerful totem of hope and transformation, it embodies an end to a cycle. After a devastating year for Pakistan’s economy, now, a Phoenix flies before my eyes, in the distance, a faint mirage lingering above my newspaper as I hold it to skim past the headlines.
In the past 150 years, several stretches of time have scathed countries – ranging from France to India – where their economies had taken a nosedive in terms of GDP. About 90 of these “great stagnations,” lasted merely 6 years, with only 26 persisting beyond a decade. Of all these, the maximum span an economic slump ever lasted was for 23 years beginning in 1930 in India. Hence, economic trends, and in Pakistan’s case, a decline of 17.8% since 2018 is impermanent, and sooner or later, the trend is bound to flip in our favour.
This Spring, the economy burgeons along with the flowers.
In March, exports rose up to the highest in 10 years and PKR became the world’s best-performing currency against USD. We became the fifth largest textile and apparel exporter to the USA and will soon begin exporting meat to China for the first time. Even the stock market bears good fortune, as it records the highest average quarterly volume since 2005 and our technology stocks see a surge of 500%. The FBR also makes a comeback by achieving a historic growth of 41% in tax collection. Apart from this, a decline is predicted in the consumer price index, for example, tomato prices dropped by 23% and fuel prices by 6.7% in April. Fish and vegetable prices have also become 9% and 7.8% cheaper, respectively. The IMF has dubbed Pakistan’s economic activity to be headed towards “gradual recovery”, and expects a declining trend in inflation. In addition, the sale of cement has achieved a record growth of 44% as well, due to the bustling construction sector and may well continue to rise by 70%, according to Bloomberg. Thus, a plethora of evidence indicates a positive trajectory for our beloved economy in the near future.
Furthermore, the national entrepreneurial ecosystem is in a boom, now, more than ever. The World Bank backs this up by upgrading Pakistan’s score on entrepreneurship, to 55.6 (out of a total of 75 points). Startup funding has soared to a whopping 97% increase as Pakistani startups managed to obtain a record $47 million in funding rounds during 2020. For instance, Pakistani start-ups VINNCORP, Sehat Kahani and SadaPay have raised investments worth $100,000, $1 million and $7.2 million respectively, and SECP reports registering 2,257 new companies in February 2021, which is a growth of almost 40% from last year. Even the much under-estimated Pakistani freelancers generated $150 million dollars in a year! This will all bear fruits in regards to stimulating economic productivity and output.
Moreover, the KPITB – headed by Mr Ziaullah Bangash, has specially made progressive strides towards supporting both innovative enterprise and technological skills in the youth of KP province. Resultantly, the GDP is further enhanced as it opens doors for employment or even secondary income streams. For instance, 500 young people have been trained in e-commerce by KPITB and it has now initiated fundamental IT training programs in government schools located in tribal districts. Additionally, the first Crypto Advisory Committee has been established by Mr Bangash, which is a remarkable step towards increasing technological opportunities in the country. Such courses of action should be sustained because Pakistan gained $1119.220 million by offering IT services to numerous countries during the past seven months. The export remittances from these IT services are predicted to exceed $5 billion by 2023. Therefore, much can be seen on the horizon for Pakistan’s entrepreneurial, freelance and technological spheres which are already astir.
However, with crippling debt in billions and a pandemic to control, a range of forces are at play that can paralyse economic growth. Besides this, inflation is still alarmingly high. There is an urgent need to reform the capitalist structure of our national economy which is primarily ensnared by the elite. Hence, collaboration with all stakeholders through dialogue and debate is required to obtain sustainable growth and keep economic inequality at bay. Or else, we shall face a similar ‘Decade of Development’ as was under Ayub Khan; in which the economy may have thrived but at the cost of just 22 families dominating 60% of the country’s industrial assets and 80% of its banking and insurance companies. So, this elitist economic structure must be made more democratic.
May this Spring serve as a season of bloom for the economy, Pakistan Zindabad.
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