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Risk factors

Pakistan Tehrik-i-Insaf government has completed the 100 days honeymoon period of its government and the Prime Minister has unfolded his four-pronged strategy for clearing the mess created by past governments of two mainstream political parties but the broad parameters envisaged in long term planning to pull the nation out of the economic are yet to given a concrete shape. The nation can no longer afford the misleading dramatics of pseudo economic wizards like former planning minister Ahsan Iqbal in the form of short documents consisting of few pages like “Prime minister’s Programme 2010” and “Vision 2025”, and piling up foreign exchange reserves by acquiring expensive commercial loan, which was the favourite modus operendi of the devoid of economic vision accountant finance minister Ishaq Dar.

The talks with the International Monetary Fund on bailout package remained inconclusive. Pakistan’s ease of doing business is likely to be affected in the coming decades as the $ 300 billion economy struggles to mitigate imminent risks, says a report released by World Economic Forum (WEF). The report has listed ‘Regional Risks for doing business’ which include water crisis, unmanageable inflation, terrorist attacks, failure of urban planning and critical infrastructure as immediate risks faced by the country with 220 million inhabitants. The risks were identified after WEF carried out through an Executive Opinion Survey between January and June. The findings were tabulated after receiving responses to survey’s risks-related question for a number of South Asian developing countries

The survey report highlights 10 major risks to doing business including failing of national governance, unmanageable inflation, unemployment and underemployment, cyber attacks, failure of critical infrastructure, failure of finance mechanism and institutions and large scale involuntary migration from rural to urban areas and illegal immigration to foreign countries in search of better living. Most of these risk factors have been made an integral part of the politico-economic system by the government two mainstream political parties to strengthen the hold of feudal and mercantile classes on the corridors of power and obtain exclusive control over national resources. The outcome is visible in dismally low Human development Index (HDI) of 0.5 percent, pushing 55 percent of population below the poverty line, making 40 percent of people to face food insecurity, low literacy rate, massive unemployment and large-scale underemployment.

Failure of the governments with oligarchic style of elected leadership during the past 46 years has confounded the economic woes of the country. It was this leadership that deliberately pushed the country to acute water crisis by showing open animosity to construction of big and small dam and introducing water conservation methods in the use of water from the available storages for irrigation and domestic usage. Human resource development was abandoned and doors were slammed on the pursuit for advanced scientific, engineering and technological knowledge. Financial corruption was institutionalized and insatiable lust for money laundering was promoted to build offshore assets.

The WEF report cautions against cyber attacks as computer systems are being run by Microsoft products. One of the sophisticated recent incidents was cyber attack in Pakistan, where banking institutions were hit and innocent customers were the ultimate victims. They were robbed off millions of rupees. This was due to the negligence and overlook of the authorities and government officials dealing with the matters of cyber security. Cyber experts in Pakistan have always suggested the government to upgrade the firewall security of online activities.

The unmanageable inflation is the second risk factor which is the combined effect of high energy tariff contracted with private power producers and expansionary fiscal and monetary policies. In July this year Pakistan’s inflation rate reached four year high as rupee value continuously depreciated.

Unemployment and underemployment is the third leading risk in Pakistan like some other countries of the region. In the decade of 1960s, it was mandatory for doctors and engineers in Pakistan to get NOC before going abroad on a visit visa of few weeks because there were numerous jobs. But when Z.A Bhutto played havoc with the economy in 1970s, rate of unemployment went up and underemployment became a regular feature in the economy. Master degree holders were looking for low grade jobs. The speedy downturn of the economy during the past 10 years, slashing budgetary allocations for human resource development and gross violation of merit have given impetus to illegal immigration activities through human traffickers. The risk factors, confronting the economy, need addressing on priority basis with viable strategies and long term planning.

 

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