Pakistan is a country where the solutions for economic ills are easily prescribed by every task force and committee formed after periodic intervals. There is no dearth of policy prescriptions. A lot of literature is available in academic and business circles that deals with prescriptions for the recovery and rehabilitation of Pakistan’s economy.

There are some permanent features of any strategy of an economic turnaround, ie addressing the twin deficits (on fiscal and current account sides), increase in the tax base, restriction on luxurious imports, elimination of circular debt, reformation of state-owned enterprises, eradication of red tape, increase in foreign direct investment and documentation of economy.

However, the unfortunate reality is that there has been no real effort to transform the country practically. The precise question is not which reforms to devise but how to kick start and sustain the reformation process.

The economic reformation in Pakistan requires policy continuation and stability. When policies will be implemented and continued sustainably by every government in power, the country will start witnessing a turnaround.

Lessons from India and Bangladesh educate on the importance of policy continuity

For this, we need to examine the steps taken by our eastern neighbours because of the socio-eco-regional proximity. The Indian government led the reform agenda of economic liberalisation after 1990 and dismantled the then prevalent and notorious licensing regime. The economic team led by Manmohan Singh sought concurrence from all power stakeholders. Accordingly, the Indian governments successively owned the reforms initiated in the early 90s and ultimately, the result of that politico-economic fasting paid off.

The same is the case with Bangladesh. Despite the extreme political polarisation that Bangladesh has witnessed, certain issues have stood the test of time and political expediencies. The foremost is population control. In 1971, the population of both countries was roughly equal, but today, Bangladesh’s population is approximately 75 per cent of Pakistan’s population.

This reflects the seriousness of effort and ownership on the part of political leadership despite ideological differences. Bangladesh has another feather in its cap in the shape of women’s participation in the workforce. In Pakistan, female labour participation is about 25pc while in Bangladesh, it’s 43pc. One can ascertain the impact of that participation on the country’s productivity.

Despite political differences, Bangladesh’s effective population control initiatives led to a lower population than Pakistan’s, even though they had equal populations in 1971

Bangladesh’s name is nearly synonymous with floods, hurricanes, famines, natural disasters and extreme weather conditions, as it is situated in a deltaic region. Regardless of changes in political dispensations, the state of Bangladesh has invested time, money and intellect in sustainability and climate change resilience institutions.

Furthermore, Bangladesh and India have religiously followed the doctrine of export enhancement. Exports attain a sanctified status in India and Bangladesh. Conversely, Pakistan’s total exports can hardly finance less than half of total imports.

There are negligible human capital investments, resulting in an enormous brain drain (the much-deliberated figure of 700,000 educated youngsters leaving the country last year). This brain drain is not a boon in the expectation of foreign remittances but a bane for a nation eagerly awaiting a new skill set in order to convert its potential raw resources into value-added, first-world exportable products and services.

During the last decade, the China-Pakistan Economic Corridor and the consequent emergence of Special Economic Zones (SEZ) were the talk of the town. Unfortunately, that has not been realised. Faisalabad (Punjab), Rashakai (Khyber Pakhtunkhwa), Dhabeji (Sindh) and Boston (Balochistan) SEZs are under construction. A lot more time is needed before these SEZs can be operational.

Conversely, if we look at Bangladesh, there are 97 operational SEZs, and the result is nearly $60 billion in annual exports. If we, as of today, assume Pakistan’s exports to be as high, half of our country’s economic problems will be solved.

The reality check, therefore, demands a practical and realistic approach with due consideration to the socio-political dynamics of the country. As a country, we cannot survive without changing our course while shunning political differences and agreeing on an uninterrupted economic reform agenda.

The irony is that countries devoid of natural resources, like Japan and Singapore, have achieved triumphs. However, Pakistan still operates in a bare survival mode. Mere failure is not a matter of concern; the absence of the realisation of that eminent failure and devastation is the real disease hurting Pakistan. This realisation from all power stakeholders is the need of the hour; otherwise, the future portrays a very bleak picture.

The writer is a civil servant

Published in Dawn, The Business and Finance Weekly, December 11th, 2023