Dark clouds of war still exist in intensifying tension area of Asia comprising Iran, Iraq borders and Gulf. It is point of satisfaction that both sides U.S and Iran took immediate action to deescalate the sparkling tension created as a result of U.S attack on Iranian Senior General Commander Sulemani in Iraq and reciprocal Iranian attack on U.S base in Iraq in order to take revenge of his death. Later, both the sides showed their willingness to defuse burning situation and saved most sensitive area, which is being used in International trade including bulk Oil shipments to other parts of the world, from flames of possible horrible disaster of 3rd world war.
In Pakistan, economy is still in whirlpool including weak public finances, large gap between low exports and higher imports, large fiscal deficits coupled with a balance of payment crises, burden of high public debt resulting high government debt GDP ratio where as external finances remain fragile with low Foreign Exchange reserves, slowdown economic activities, increases in energy tariffs, alarming unemployment rate increased to 5.8% and high inflation rate.
This alarming situation is result of long political instability in the country, massive corruption at all levels, absence of good governance, long geopolitical vulnerable situation due to inside and outside security issues.
On reviewing our performance by International organizations and Financial Institutes growth projection for Pakistan is predicable by U.N as 2.1%, International Monetary Fund (IMF) as 2.4% World Bank (WB) in 2.4% and Asian Development Bank (ADB) at 2.8% for the year 2020 even less than Bangladesh, Nepal, Bhutan, Maldives, and Vietnam where as Pakistan liquidity ratio is 111.4% which is also very weak and discouraging.
To combat this worsening situation, immediate structural reforms are required to meet revenue short falls projected to Rs. 600 billions for current Fiscal year 2020 by widening tax net besides other steps for consolidating fiscal condition like increasing nontax revenue also, and by narrowing more current A/C deficit which has reached to U.S Dollars 2.153 showing sharp decline up to 75%. Moreover, extra efforts are needed to accelerate momentum in inflows of home remittances in our economy which has witnessed 3.31% increase as it reached to U.S Dollars 11.40 billion from July 2019 to Dec 2019 ie. 1st half of Financial year2020 and it is expected that target of achieving U.S Dollars 24 billion from home remittances will be achieved easily till the end of the Fiscal year 2020 which is very essential in low performance of our export sector.
Firm steps are also required for improving investment environment all over the country including less privileged areas, increasing employment opportunities, tightening and create good governance in State-Owned Enterprises which are a constant source of big leakage of government funds because all are running in losses since long proving a heavy financial burden on national exchequers.
By Mujeeb Ur Rehman Khan, Socio-Economic Analyst
