Economic Woes in Pakistan: Consequence of Handling

Multidimensional Projectile from the Front

Now days it looks that Pakistan is suffering from economic crisis and passing through a trough of chronic
current account cycle relating to the economy. This situation is not new for Pakistan rather it happens
again and again periodically. No certain government could be blamed for these types of crises and
overall the nation as whole is a cause, hence all the regimes are condemnable. Basic problem could not
be related to individuals but to the inhabitants. Therefore, necessary element is not to rely on
responses but on behaviors. Problems, crises and harms are part of life which could not be drawn to a
close absolutely but if you are able to establish efficient institutions then problems along with their
severity could be minimized. Therefore, any regime if serious in solving the problems is to require
focusing the issues from multiple dimensions.

Current situation is also solvable but first turn to the issues. So far as economic issues are concerned
even severe in nature but could be tackled. But you have to be rational to handle the situation.
Rationality dictates that in shorter period of time problems might not be resolved but could be
managed. Need is to handle the situation on the basis of time. I don’t think myself as an economist but
being a student in the field I am of the view that time has two major dimensions i.e. short run and long
run. No certain time period could be specified for short run and long run but it depends upon the
scenario you have to face in the problem. Hence, the economic problems recently facing by Pakistan
could be diminished if a regime considers multidimensionality aspect of time and avoid solving the
problems only in the short run while considering the front matters e.g. in recent scenario front matter is
paramount current account deficit.

Currently, in the short run it is required to follow past policies and same should have been followed by
the current regime also. Try to avail a bailout program from IMF, seek help from the friends who always
proved to be lender of the last resort for Pakistan, ask for help to Pakistani nationals by offering bonds
on relatively lesser or equivalent interest rate in comparison to IMF, try to extract revenues as maximum
as possible (being an extractive State) and attempt to reduce expenditures optimally etc. If you are
following the same then you are working on the right track in the short run because all past
governments along with pundits in World economic forums also use to observe the same and found to
be able for managing the problems. No worry what others say on handling the problems without
observing any “significant change” in policy measures because change itself is a time taking problem and
relates to long run and not relates to the short run.

But if you want to differentiate from the past governments then along with utilizing short run dimension
efficaciously (MUJARAB) in economic management, you are also required focusing on long run
dimension for economic solutions. Suggestions for the long run management are also discussed here
which are based on exposure and expertise of a teacher based from remote areas of southern Punjab.
The suggestions could not be termed as absolute on account of bounded rationality. The exposures and
expertise of the policy makers sitting in economic institutions are vast enough to suggest much better
prescription for long run but these suggestions might be able to provide a base for the same. Hence, the
need for current government is to consider long term dimension in its policy making so that a “change”
could be observed in behaviors. Most important factors inter alia to be focused in the long run are:

1. Engage in working of economic institutions: Empowerment of institutions; and establishment

of linkage between their research and development wings and educational institutions.
2. Engage in resource base: Broadening the tax base by documentation of the economy; and
restructuring the tax base by significant enhancement in proportion of direct taxation.
3. Engage in environment: Planting trees everywhere, managing water reservoirs as per needs of
future population, and assuring requisite size of green parks in every square KM of cities are
most urgently required investments for existence of population, the base of every aspect of life
including economic activities.
4. Engage in human resource development: Allocate sufficient budget resources for health,
education and justice and link the job security of teachers, doctors and judiciary with
performance which evaluated on the basis of third party criterion.
5. Engage in labor force: Recognize that population is not the problem but a basic resource of the
country i.e. labor force; hence, attempt to utilize labor force by imparting internationally
demanding skills; enhancing international mobility; and exploring work horizons at globe
through embassies. Utilize resources efficiently by turning towards export in advantageous
aspect of the economy i.e. labour force.
6. Engage in Infrastructure: Establish a system which automatically works for provision of energy,
transportation and telecommunication infrastructure as per economic need.
7. Engage in International Trade: Open trade vistas for whole of the World; recognize export
potential and protect only advantageous sectors; division of areas for productions in
advantageous sectors on the basis of availability of inputs. No need to indulge in commercial
policy for restricting import of luxurious and imported commodities but curb the consumption
of such commodities by using the tool of heavy taxation on their sales.