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Debate / Ideas for solutions to Pakistan's economic problems

You need to create a safe positive enviornment for the funds to flow in. At the moment you are in a place of lack and insecurity and investors are keeping away.

Lose that ego, its not even yours. False pride
 
Incorrect. Water scarcity is just another sign of the real problem: a rapidly and unstoppable rise in population. And no solution in sight or mind.
Not really, we dont know how to use water. How many developed countries in the world dont have water meters?

As long as water usage is unregulated, there will always be issues, no matter how many dams or reservoirs are built.
You need to create a safe positive enviornment for the funds to flow in. At the moment you are in a place of lack and insecurity and investors are keeping away.

Lose that ego, its not even yours. False pride
Judiciary is THE most scared cow.

Talking against its corruption and incompetence only invites its wrath, which cannot not only shake the corridors of power, but take down the govt.

There is a saying: "If you want to win a case, dont hire a lawyer, hire a judge"
 
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Both of you are true.
Water and population problem.

Pakistan does not have "massive fertile land", rather we have a limited amount of fertile land which is very rich in nutrients and irrigated by several massive rivers. The reason for this rich fertility is the 8000 years of continuous farming that have occurred in the Indus Valley since the first pastorolists arrived in Mehrgarh in around 7000 BCE.

This is why in the entire 9000 years of history of the Indus Valley, we've never heard of any major famine...that is until the European colonialism began in 1842 coupled with advances in medical technology and science. This led to people living longer, which meant a sudden boom in the population - our water table and current available fertile land will not be able to sustain anything above 250 million. Furthermore, during European colonialism, a culture of "moving to the cities" occurred as industrialization replaced agriculture as the prime type of work.

This means more fertile agricultural land will be destroyed around cities (ie. Lahore).

Pakistan has to curb its growth rate...ideally, we should be around 150 million. Nothing more than that.
 
That Sir, is a hornets nest, one I feel will be tackled maybe 2~5yrs down the road. It will be another Iwo Jima, unless MQM and PPP both are neutered.
Well our lovely establishment removed one evil (MQM) but gave the other evil (PPP) free hand to do as it pleases. If it weren't for their own vested interest of cheap land for DHAs and lucrative contracts for FWO, PPP would also have been handled.
 
Both of you are true.
Water and population problem.

Pakistan does not have "massive fertile land", rather we have a limited amount of fertile land which is very rich in nutrients and irrigated by several massive rivers. The reason for this rich fertility is the 8000 years of continuous farming that have occurred in the Indus Valley since the first pastorolists arrived in Mehrgarh in around 7000 BCE.

This is why in the entire 9000 years of history of the Indus Valley, we've never heard of any major famine...that is until the European colonialism began in 1842 coupled with advances in medical technology and science. This led to people living longer, which meant a sudden boom in the population - our water table and current available fertile land will not be able to sustain anything above 250 million. Furthermore, during European colonialism, a culture of "moving to the cities" occurred as industrialization replaced agriculture as the prime type of work.

This means more fertile agricultural land will be destroyed around cities (ie. Lahore).

Pakistan has to curb its growth rate...ideally, we should be around 150 million. Nothing more than that.
With proper resource mgmt, rural education/vocational programs, better governance, we can neutralize these threats to a very great extent.

Needless to say, this has to be done on a war footing.
 
Pakistan has to curb its growth rate...ideally, we should be around 150 million. Nothing more than that.

And yet there are threads on PDF extolling the virtues of a large population as a valuable resource for both production and consumption, not realizing the efforts needed to develop such a resource.
 
With proper resource mgmt, rural education/vocational programs, better governance, we can neutralize these threats to a very great extent.

Needless to say, this has to be done on a war footing.

Only if we have sincere top heads till root level.
 
Well our lovely establishment removed one evil (MQM) but gave the other evil (PPP) free hand to do as it pleases. If it weren't for their own vested interest of cheap land for DHAs and lucrative contracts for FWO, PPP would also have been handled.
Pee Pee Pee issue is much more complex, step on pigs tail and it starts playing the Ethnic + Sectarian card. Eventually it will be neutralized, but I have to admit, it is happening at a snails pace, which is further alienating major urban areas of Sindh as well. Just visit Larkana, or Gadhi Khuda Bhaksh, the level of development is simply mind boggling!
And yet there are threads on PDF extolling the virtues of a large population as a valuable resource for both production and consumption, not realizing the efforts needed to develop such a resource.
Despite small families, some people just end up with useless drunks, oh the irony!
 
What is the tax slab in Pakistan ? Pakistan will have to make harsh step for business men and elites to know about their income. I know it will be unpopular step and will not be liked by business fraternity but they are the one who does not pay tax unfortunately this is a trend in South Asia. India introduced GST for the very same purpose and it immensely helped to know about all transaction been done by business men's.
 
In the 1951 Census; the first one I can remember, the total population of Pakistan was about 76 million. Out of which about 34-million lived in West Pakistan and 42 million in East Pakistan. The figure for Pakistan per the 2017 census is 207.7- million. Whereas the latest estimate for Bangla Dash is about 166-million only. The latest estimates put Pakistan’s population at 220-million with an average annual growth rate of about 2% in the 50 years and close to 3% during the last decade; among the highest in the world. With the finite arable land available, for food production, such a high growth rate cannot be sustained no matter what.

Another major impediment in Pakistan’s economic growth is the circular debt which now stands at Rs 2.3-trillion (https://www.dawn.com/news/1600293 ). Since Pakistan’s GDP is only $300-bilion (Rs 45-trillion) this represents 5% of the GDP and 35% 0f the total budget revenue target of Rs6.573-trillion. (https://www.dawn.com/news/1563189)

Based on the above, even a blind man can see that unless the population rate is halved and some way found to clear the circular debt, there is no hope for Pakistan ever getting out of the poverty trap and join the middle-income countries.
 
Creeping crisis: land, population and horizontal expansion in Punjab

mushtaq-soofi

Published May 17, 2021


Traveling on asphalt roads is one of very reliable means of knowing and understanding what is happening in the contemporary Punjab.

Roads are equivalent of rivers of the ancient world. Roads support human settlement and facilitate movement in our times the way the rivers did in the pre-modern world. Harappa is on the bank of a river [Ravi/ Eravati] and it were waterways that helped traders from our land to do trade with Mesopotamia where Harappa seals have been found.

Crude replicas of modern settlement now can be seen anywhere and everywhere along the roads and highways. If you start out on your journey from Lahore, the capital of the Punjab, in any direction, north or west or south [You can make little headway towards east as Wagha border with India is now suburb of Lahore], you encounter the same phenomena. All along these intercity roads you endlessly see two distinct but interrelated things; petty businesses and newly carved out housing societies on fertile agricultural lands with ill-sounding pseudo modern names spelt wrongly in English. It’s dusty and dirty unending stretch of monotonous landscape dotted with horizontally built eyesores. By the time you hit the next city, you have already become blue in the face after sighting so many monstrosities made of mud and bricks.

Now the question is: why the intercity roads are thronging with people especially with the poor from the countryside? The phenomenon is a direct outcome of the crisis agriculture faces which governance has failed to address.

With the passage of time the land holdings have shrunk as a result of division of land with each coming generation. Medium size holdings have turned in small ones making the farming on them economically unviable. Small holdings, even large ones, in the age of mechanised agriculture employ a few hands in a rural society that traditionally prizes large family, a vestige of times when manual work required greater number of hands.

The traditional practice of having large family did twofold function; it supplied workers for labour intensive farming and also provided a sense of security that state, whatever its composition, had never been able to do in our part of the world.

Coming to the governance side, one realises that with increased focus on urban centres and shoddy industrial production - which has no buyer in the international market - countryside and agriculture have cruelly been neglected by concerned departments and successive governments. The consequences have been dire.

Agriculture needs help in terms of availability of improved inputs at affordable prices, unadulterated pesticide and spray, subsidies and support price for crops. Additionally it needs reduction in multiple taxes under which it groans like an over-loaded donkey. Babus in suits and waist-coats ensconced in their posh offices who make policies along with politicians, indifferent to the plight of the farmers, conveniently forget that if this country averts mass starvation, it’s because of its half-naked peasants. Their fields, in the words of Waris Shah, are ‘aflame’. Who will douse the fire that metaphor refers to? No rescuer is in sight at the moment.

Members of rural community with their lingering doubts regarding small family continue breeding like rabbits. Finding farming unviable and no employment they, unskilled or semi-skilled, throng the roads and highways to eke out living which subsequently have turned into substandard dusty workshops and shanties heavy with overhanging stench of chaotic mess. While driving you can see a lot of village idiots sitting on rickety benches to kill time. Grinning vacuously they sip their unbearably sweet tea counting the vehicles that whiz past them. They do it day after day without an iota of boredom or weariness as if it’s a productive practice.

And now the rural rich! Since they find farming no longer lucrative, they have stopped self-cultivation or leasing out their lands that are close to highways or roads. Population explosion has opened new avenues for them to do a profitable business.

Real estate is currently the most lucrative commercial activity which doesn’t require hard work and is the least risky. Proposed housing societies bearing funnily weird names line all highways and roads with land parceled out into plots to build houses on. Most of them though are a work in progress due to the prices of plots irrationally hiked up. Most of these societies are short-term projects designed to make a quick buck. The paradox is that with an increase in population the number of buyers hasn’t gone up which is otherwise thought to be a natural outcome of such a process.

On the contrary the number has plummeted. People need shelter but don’t have deep pockets in an economy which is extremely extractive and predatory in nature as it neither rewards traditional hard work nor values modern knowledge generation, the things that can set life in contemporary society on an even keel. That’s perhaps the reason that most of such housing societies present a deserted look and make you unnerved with what resembles the eeriness of an empty town.

Michael Williams writes in his paper “The enclosure and reclamation of waste land in England and Wales in the eighteenth and nineteenth centuries”: “The objects of enclosure were to make farming more efficient and productive. In the open fields the need was to redistribute and amalgamate the fragmented holdings into compact farms that were easier to work--”. Here on the contrary, particularly in the Punjab, one can observe the process in reverse as the traditionally compact farms are turning into fragmented holdings.

Commoners in the countryside in Britain saw the enclosure eating the pasture while here people see real estate eating the fields. The difference is that by expanding the arable land, the act increased agricultural production in the Britain while here we decrease our agricultural production by turning large chunks of our fertile land into residential properties not caring that nothing grows on stone and concrete. But the creep of housing societies that shrinks our countryside doesn’t disconcert our panjandrums.

To salvage the fraught situation what we urgently need to do is to put an end to further fragmentation of agricultural land and to say emphatic no to horizontal expansion of cities and towns. But who will revisit the policy which is in reality lack of policy? The lack of policy suits the ruling class which can’t abide the thought of following the laws enacted by their own representatives. So who will “dare disturb the universe” where the powerful are free to make a fast buck with minimum fuss? Let’s not forget nature will intervene if we don’t. The problem will be intractable if we let the grass grow under our feet.

soofi01@hotmail.com

Published in Dawn, May 17th, 2021
 
Dear friends, from quite some time I wanted to initiate a debate on economic development of Pakistan but due to personal and professional commitments never got time to actually write something. Leveraging on eid holidays I am initiating the topic where I would like you guys to share your ideas.

Those interested in politics are already well aware of key economic problems of Pakistan. Thanks to consistent budget deficits Pakistan has a mounting public debt as a result most of the budget get utilized in debt servicing rather than for any development project.

On the other hand consistent and huge trade deficit keeps on pushing for currency devaluation and need for borrowing from abroad; putting Pakistan under influence of its creditors.

The twin deficit coupled with low economic growth resulted in vicious circle where Pakistan’s per capita GDP growth is getting lower and lower in comparison to other comparative economies.

However, most of these are only the symptoms of poor economic management rather than problem itself. Our problems are structural in nature and requires a lot of economic restructuring before any benefits can be seen. Short term decision making of the ruling elites for the personal benefits has made our business uncompetitive. Our resources and money is being used for hoarding and speculating mostly in non-productive sectors. Most safe and profitable investment is to buy a property and wait for prices to increase which is a total wastage of resources. Similarly in commodity sector most of the profit earned by the middle man (arti) rather than the producer or risk taker.

Although government and establishment has realized that without a strong economy survival of Pakistan as a nuclear nation is impossible and is focusing her efforts for increasing export and import substitution but till to date the improvement in external trade account is still small in comparison to required target.

Despite putting a lot of efforts bringing economic experts from around the world and having support from establishment; the results are still far from encouraging, so what the real reason behind such a slow progress?

In my opinion Pakistan structural issues are not even touched till to date. The remedies suggested by the government is again addressing the symptoms without touching the core structural issues of the economy.

In my opinion to address the structural issues of Pakistan government need to work on following areas:

  • Development of human resources capable of dealing with modern day challenges in every field of life. Right from an engineer to a farmer, every individual person in the work force should be developed, trained and retrained to become competitive to one of the best among the world. Need to establish institutes, online courses, access to resources and internet to the work force teaching them the efficient ways of production.

  • Establishment of research and think tank institutes free from political influence comprising of one of the best brain in their respective fields. Those research centers and think tanks should be responsible for policy making and monitoring development progress in their relevant field.

  • Pakistan economy lacks the basic backbone industries without which industrialization is nothing but a wet dream. In order to industrialize Pakistan we need to invest heavily in steel industry, petrochemical industry, electronic industry, artificial intelligence industry, and electrical goods industry, heavy machinery manufacturing industry and bio sciences. Till to date the only investment being done is in energy sector and housing sector only.

  • All these industry will provide basic raw material to other manufacturing companies. However, these industries need some serious heavy investments which an individual investor is not capable to arrange. And hence we move to fourth area where we need to work on.

  • The fourth area where government needs to work is establishment of special purpose financing vehicles that can collect finance from individuals and then invest those finances into venture capital industry to establish new organizations to the likes of Pakistan steel mills, PICIC commercial bank, PECO and other such flagship organization. However, the key is here is to arrange finances only while keeping the operations to professionals only and exiting the organization after 2 years of profitable operations.
These are some of the ideas that I can think of right now. I am sure, some you might have even greater ideas or can add a lot to my opinion. Looking forward for further suggestion from respected members.

Bureaucracy: Need to replace that with more efficient process( automation of all process) and make sure people always work on backside not front side and they contact person online only with file number with any name or contact so that he will not take any advantages at all (Result less corruption and more efficiency because everything is monitoring)

Import raw material only: It will reduce our import bill and due to this policy, we can make our good by our self and it will generate revenue greatly.

Software workshops: Create big poll of software engineers for freelance and after proper training, with minimum investment (60 to 100k PRs for devices like laptop or desktop) he can start getting reasonable dollars. We need to create proper facilities to overcome their needs including technical needs and in blink of an eye lets say in year or two we can have very good army of freelance programmers and we can earn billions from it.

Mining: We need to take our our renounce from our self. We can start doing this by creating a independent company with joined share of federal and provinces and they have a right to dig anywhere in Pakistan without any permission. All shareholder must invest on this project with equal share on 1billion dollar each and can invest this within 5 years and company will pay return 20% of their profit back to share holder\year in total after 5 year onward and company must invest its 60% to 70% of their return to other mining projects. 10% will be given to management for processing the operations.

Shipping: Reduce ships license fees, enable us to doing good business and also it increasing our business via sea.

many more options are there to improves our economy
 
Dear friends, from quite some time I wanted to initiate a debate on economic development of Pakistan but due to personal and professional commitments never got time to actually write something. Leveraging on eid holidays I am initiating the topic where I would like you guys to share your ideas.

Those interested in politics are already well aware of key economic problems of Pakistan. Thanks to consistent budget deficits Pakistan has a mounting public debt as a result most of the budget get utilized in debt servicing rather than for any development project.

On the other hand consistent and huge trade deficit keeps on pushing for currency devaluation and need for borrowing from abroad; putting Pakistan under influence of its creditors.

The twin deficit coupled with low economic growth resulted in vicious circle where Pakistan’s per capita GDP growth is getting lower and lower in comparison to other comparative economies.

However, most of these are only the symptoms of poor economic management rather than problem itself. Our problems are structural in nature and requires a lot of economic restructuring before any benefits can be seen. Short term decision making of the ruling elites for the personal benefits has made our business uncompetitive. Our resources and money is being used for hoarding and speculating mostly in non-productive sectors. Most safe and profitable investment is to buy a property and wait for prices to increase which is a total wastage of resources. Similarly in commodity sector most of the profit earned by the middle man (arti) rather than the producer or risk taker.

Although government and establishment has realized that without a strong economy survival of Pakistan as a nuclear nation is impossible and is focusing her efforts for increasing export and import substitution but till to date the improvement in external trade account is still small in comparison to required target.

Despite putting a lot of efforts bringing economic experts from around the world and having support from establishment; the results are still far from encouraging, so what the real reason behind such a slow progress?

In my opinion Pakistan structural issues are not even touched till to date. The remedies suggested by the government is again addressing the symptoms without touching the core structural issues of the economy.

In my opinion to address the structural issues of Pakistan government need to work on following areas:

  • Development of human resources capable of dealing with modern day challenges in every field of life. Right from an engineer to a farmer, every individual person in the work force should be developed, trained and retrained to become competitive to one of the best among the world. Need to establish institutes, online courses, access to resources and internet to the work force teaching them the efficient ways of production.

  • Establishment of research and think tank institutes free from political influence comprising of one of the best brain in their respective fields. Those research centers and think tanks should be responsible for policy making and monitoring development progress in their relevant field.

  • Pakistan economy lacks the basic backbone industries without which industrialization is nothing but a wet dream. In order to industrialize Pakistan we need to invest heavily in steel industry, petrochemical industry, electronic industry, artificial intelligence industry, and electrical goods industry, heavy machinery manufacturing industry and bio sciences. Till to date the only investment being done is in energy sector and housing sector only.

  • All these industry will provide basic raw material to other manufacturing companies. However, these industries need some serious heavy investments which an individual investor is not capable to arrange. And hence we move to fourth area where we need to work on.

  • The fourth area where government needs to work is establishment of special purpose financing vehicles that can collect finance from individuals and then invest those finances into venture capital industry to establish new organizations to the likes of Pakistan steel mills, PICIC commercial bank, PECO and other such flagship organization. However, the key is here is to arrange finances only while keeping the operations to professionals only and exiting the organization after 2 years of profitable operations.
These are some of the ideas that I can think of right now. I am sure, some you might have even greater ideas or can add a lot to my opinion. Looking forward for further suggestion from respected members.


Here are my two cents.For starters IK should have taken full advantage of the trade war and the resulting tech and currency wars that came with it and unfortunately he didn't.Here is the example of Proctor and Gamble desiring to open a new factory in USA but most of the components are sourced from China


Now Pakistan enjoys FTA with China which means those pipes and vessels required can be imported duty free.Also Pakistan has a GSP status given to it which means that the products made in that facility can be exported duty free to the USA.

Similarly some 50 multinationals desired to relocate


Vietnam grabbed this opportunity with both hands while we were sleeping.

We could have offered them SEZ facilities/FBR tax concessions under Industrial Undertaking/Pioneering Industry as well as subsidies financed from the unutlized Export Development Fund


 
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