Fifty percent of Pakistan’s economy is undocumented meaning there would be no taxes on the books not kept. Also, in the documented economy, almost all the registered taxpayers keep two books. These are unchartered areas, unaccounted. State-owned enterprises (SOEs) in certain sectors incur significant losses annually and also hinder the competitiveness of our economy through opportunity costs. By privatizing these SOEs, we can decrease the role of the government, increase tax revenue, and stimulate employment and economic growth. Privatization is always against assets that are of value to the private equity holder and the garbage remains for the Government e.g. the private entities are always discussing Roosevelt Hotel property in New York when it comes to PIA but nobody wants to rectify the operational capabilities.
How could the IMF come up with CPEC?
During Ishaq Dar’s previous tenure as Finance Minister, the inflow of dollars from the China-Pakistan Economic Corridor (CPEC) and low oil prices helped to stabilize the economy and gave Dar more influence. However, this is not the case currently as these factors are not present. Back in the day, the International Monetary Fund had described Pakistan’s economic outlook as positive, citing improvements in energy availability and structural reforms that support growth. According to the IMF, investor confidence in Pakistan was increasing as the economy stabilized following the completion of a bailout program. The report cites Chinese infrastructure investments as a factor in economic development, noting that these projects will create opportunities for local entrepreneurs and contribute to balanced economic growth across all sectors of the economy.
Approximately ten years ago, Indian media frequently focused on the positive aspects of the country’s economic growth, creating a positive perception and attracting investment from both domestic and foreign investors. This helped to improve the country’s economic situation. The government is trying to improve the perception of the economy, but these efforts have been weak and hindered by opposition parties that control significant parts of the country, including Kashmir and Gilgit-Baltistan. If the government could effectively address the challenges posed by opposition leader IK, particularly in Punjab, the economic situation could improve in a few months.
It seems that today there is a significant level of uncertainty in Pakistan’s economy, causing concern and discomfort. The stock exchange in Pakistan has been experiencing a decline over the past few months, which may be due to manipulation by non-Pakistani fund managers and the withdrawal of foreign investment. Additionally, exports have decreased significantly and the country is struggling with debt. It is important to note that the performance of the stock exchange does not necessarily reflect the overall health of the macroeconomy, as assessed by organizations like the IMF. It may be necessary for the government to implement policies to address these economic challenges and stabilize the economy.
