Dr. Amir Husain
PricewaterhouseCoopers (PwC) is among the largest professional services firms in the world. Last month, the organization released a very interesting report under the title ‘World in 2050’ wherein growth projections have been worked out in respect of 32 largest economies of the world. The report has predicted that Pakistan’s economy, presently 24th largest in the world, will steadily grow and become the 16th largest by the year 2050. Over this growth trajectory, GDP of Pakistan will swell to $4.3 trillion and will overtake in size even that of South Korea, Italy, Canada, Iran, Thailand, Spain, Australia and Spain.
These projections are highly remarkable and accentuate especially in the backdrop of jolts our economy has withstood over the recent past due to a number of reasons. Being a frontline state against the war on terrorism, Pakistan has sustained extensive damages. Not to talk about the irreparable loss of precious human life, which runs into tens of thousands in body count, economic losses faced by the county on this account are estimated at more than $105 billion over the 15-year period from 2001 to 2015.
Furthermore, our geography is prone to natural calamities. Floods and earthquakes are not that uncommon in this part of the world and always leave behind infrastructure ravaged by varying degrees, adding further burden to the economy.
Mega earthquake of 2005 and epic floods of 2010 are a case in point. According to conservative estimates, Pakistan has faced losses of about $14 billion over the 5-year period from 2010 to 2015 due to floods alone. Compounding this situation even further is the fact that Pakistan has grappled with energy crisis over the recent past. Power shortages and suspended gas supplies started showing their ugly face in 2007 and gradually exacerbated the extent of crippling our industry in particular and economy in general.
When viewed in the backdrop of all these facts, the projections about the high growths of Pakistani economy by an independent reputable organization are but a testimony to our economic resilience and warrant being lauded by the global community.
It is to be pointed out that predictions about phenomenal progress of Pakistan are but well-founded and based on objective analysis of the situation. We have made remarkable progress in various areas of economy in the recent times.
Pakistan successfully completed 3-year IMF program in 2016. Over this period, we have pursued a rigorous agenda of economic reforms and are now witnessing its positive results. Pakistan has gradually achieved macroeconomic stability from the state of being on the verge of default and now striding on the path of growth. We have maintained a growth momentum of above 4% for three years in a row. 4.7% real GDP growth witnessed in FY2016 is the highest in last eight years. Fiscal deficit has been brought down to 4.6% compared to 2013 level of 8.8%. Our foreign reserves level were all-time high on Feb. 1, 2017 standing at $22 billion.
Thanks to persistent improvements in situation regarding law and order, power supplies and business climate, the industry as well as agriculture sector is showing visible signs of recovery: various cement factories are undergoing capacity expansions; the refineries are upgrading their plants and numerous textile units are in the process of modernizing their manufacturing units. The spillover effect of strengthened community-producing sectors i.e. industry and agriculture will greatly benefit the services sector.
The boosted confidence of the investors in Pakistan is palpable in the performance of our stock market which has been exhibiting historic high levels. Perhaps the biggest sign of trust in Pakistan as an attractive destination of foreign investment is the China-Pakistan Economic Corridor. The level of investments committed in this strategic project has been recently revised upwards in September 2016 to $52 billion compared to the original size of $ 46 billion.
It is worth noting that PwC Report of 2017 is not the first commendation which economy of Pakistan has earned by an organization of world repute. In 2015, Japan External Trade Organization (Jetro) declared Pakistan as the second best destination in the world for investment.
The Economist has projected Pakistan as the fastest growing Muslim economy in the world in 2017; even ahead of Indonesia, Malaysia, Turkey and Egypt. World Bank has noted the advancements made by us in improving the doing-business climate for small- and medium-size enterprises and has included Pakistan among the global top-10 improvers in its latest report titled Doing Business 2017: Equal Opportunity for All. Bloomberg had praised Pakistan Stock Exchange as the Asia’s best performing stock market in October 2016 whereas the same publication has most recently declared the economy of Pakistan as ‘world’s most underrated economy’ in February, 2017.
These testimonials substantiate the projections that Pakistan is now poised to join the club of top-20 economies in the world.
— The writer is Commercial Attaché at the Embassy of Pakistan, Riyadh