By Muhammad Ahmad Sheikh (International Broadcaster/ Journalist/ Incharge R & D, the Sheikhupura Chamber of Commerce & Industry)
In 2000, Pakistan made significant macroeconomic reforms in various field directly related to economic growth. Reforms in the banking sector, introducing world-class anti-money laundering law, cracking down on piracy of intellectual property, and resolve quickly investor disputes. After September 11, 2001, and Pakistan's proclaimed commitment to fighting terror, many international sanctions, particularly those imposed by the United States, were lifted. Pakistan's economic prospects began to increase significantly due to unprecedented inflows of foreign assistance at the end of 2001. This trend is expected to continue till date.
In reality since the start of the anti-terror campaign, an overall sense of uncertainty has prevailed in the country and it is at its peak in Baluchistan, NWFP and in FATA. Intentionally or unintentionally this trend is now seen towards Punjab, comparatively a stable province. It has slowed down economic activities and put local and foreign investors in sate of confusion. The foreign direct investment has been adversely affected by the ongoing anti-terrorism campaign in Fata and other areas of the NWFP. Pakistan’s participation in the international campaign has led to an excessive increase in the country’s credit risk. Due to which recently, the World Bank has lowered our credit rating further.
According to the Pak-US Business Council report (2009), we are the prime victim of Afghanistan’s instability and our economy has so far suffered directly or indirectly a huge loss of $35 billion. Moreover, due to widespread unrest and political uncertainty in Afghanistan a large quantity of our food items/commodities is smuggled to Afghanistan, which ultimately leads to acute food grain scarcity within the country. This huge loss has badly affected the country's socio-economic development.
After fierce war Pak Army has regained the control of the state's effective writ over thousands of kilometers area of Mingora, Buner, Charsadda, Bannu, Peshawar, Hangu, Mardan, Upper Dir, Kohat, Dera Ismail Khan and Lakki Marwat. The tribal agencies, Khyber, Mohmand, Bajaur, Orakzai, Kurram, North Waziristan and South Waziristan have also been under attacks during 2008. In fact we did lot in war against terror but remained unsuccessful to get the genuine assistance from the donors who committed to help out Pakistan’s derailed economy.
Decline in net foreign investment and massive out flow of million of dollars from the country’s equity market was another big set back during the year 2009.
Pakistan is the sixth big country in the world with unbelievable potential and untapped mineral. The economy of Pakistan is the 27th largest economy in the world in terms of purchasing power, and the 45th largest in absolute dollar terms. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally. It is believed that its present shaky condition of Pakistan economy is due to the cosmetic behavior and discontented promises of the donors.
April last year at a conference in Tokyo, International donors had made solid assurance at a conference in Tokyo to provide over $5 billion to help stabilize to Pakistan’s economy. But most donors have yet to fulfill their pledges.
In October 2005 US secretary of state Condoleezza Rice had that said Pakistan is trusted friend of US and Washington will not leave Islamabad alone in this hour of grief and provide full assistance for rehabilitation and reconstruction of earthquake stricken areas.
This trusted friend (Pakistan) is facing 3985 Mega Watt power shortfall as the generation stands at12870 MW against the demand of 16855 MW.
A global management consulting firm with an office in Islamabad, warned in a 2006 study that Pakistan is going to witness gas shortage starting in 2007, and the imbalance will grow every year to cripple the economy by 2025, when shortage will be 11,092 MMCFD (Million standard cubic feet per day) against total 13,259 MMCFD production and the shortage would get much worse in the next two decades if it did not manage any alternative sources. It appears that we are seeing the beginning of the crisis that was predicted back in 2006.
The potentially devastating effect of the gas shortage on the nation can be gauged by the fact that Pakistanis heavily depend on gas for their energy needs. Pakistan also has the World’s largest number of CNG refueling stations, 2941 as of July 29, 2009.
Prime Minister Yousuf Raza Gilani warned the donors on 19th June, 2009 that public support for war on terror could wane if the international community failed to honour aid pledges and bail out Pakistan’s troubled economy. “Time is running out fast. Public support can only be kept intact if the international community starts delivering on their pledges,” Mr. Gilani told Richard Holbrooke, US Special Envoy for Pakistan and Afghanistan, during a meeting at the Prime Minister’s House. This daring statement gave a National bit hope that Government is not sleeping and working for National interest whole heartedly. Earlier Pakistan signed 7.5 billion dollar project Pak-Iran Gas Pipe Line Accord.
Foreign Minister Shah Mehmood Qureshi on 21st June, 2010 in press conference rejected all doubts that US sanctions on Iran would leave any affect on Pak –Iran gas pipeline accord.
Next day on June 21, 2010 Prime Minister Yousuf Raza Gilani made statement that Pakistan would abide by any US sanctions on Iran, which was certain to jeopardize the much-needed Pakistan-Iran gas pipeline project is now in doubts and may lay on side.
In this circumstance putting back the messed Pakistan Economy back on track will be a miracle.