Again how? Money from where? Globally competitive salary won't be cheap. So where do we fund this from? 43% of our budget goes to just paying off debt. Just think about it like this. If our budget is 5trillion, and from taxes we collect 3 trillion cash. That means 2.13trillion of that 3 trillion is gone for just debt, leaving behind 870billion to run civil, healthcare, education, defense, etc. But the issue is, 3.35triliion of the budget was planned to spend on these services. We have 870billion, but we are short of 2.48trillion. So where do we get this money from? This is the big problem.
[These numbers are not actual, only used as an representation for ease of understanding. The situation is correct]
Look, you have to stop people from leaving somehow. Yeah globally competitive salary is not gonna be cheap but if you don't do it people will keep leaving. Which is worse, less money or less people? Your call.
Debt is gonna be there no matter what, and you cannot cut education expenses either, in fact education and health expense probably has to go up.
Only solution I can see is to somehow increase tax collection. I cannot see any other solution for that. Use extra tax revenue to pay off debt quickly and make it a priority to start paying Pakistanis globally competitive salaries and they will stop leaving.
Even many educated people don't pay taxes here. The problem is not about afford. It about enforcement. For years, no gov has worked on improving the taxes system, until now. Once we get a strong tax system, then even the non educated ones that can afford to pay, will be taxed.
True. But how can you do that when our current situation is our exports are low, and imports are high. Everywhere you look, we are bleeding money. Its been happening for years. Because of that, it can't be stopped overnight. It takes time to slowly stop the bleeding. This is what the current gov is doing.
What you are saying is all correct. The current gov is also working towards the same. It just takes time. We are moving away from an import based economy to export based economy. If you have any idea on helping that, you can use the citizen app to send it. Gov is ear to all suggestions.
To increase exports, you need to do a couple of things
1. Devalue your currency. China did this and pissed off US because it increased demand for Chinese exports ie. Trump calling China a currency manipulator. Iran also takes advantage of its cheap currency because it makes it more affordable for other countries to buy Iranian goods, hence why Iran's manufacturing industry is strong.
2. Increase tariffs to build domestic industry and subsidize Pakistani products selling abroad. Once industry is developed, remove tariffs and sign free-trade agreements to increase exports.
3. Heavily invest in Pakistani startups and Pakistani innovation. Gov't should create a program specifically targeting startups, VC's, and angel investors with gov't backed funding as a way to strengthen economy since Pakistan by population is now largest untapped market in the world. 10 years ago, it was Indonesia, then their economy exploded and anybody who had invested in Indonesian startups made big dividends 10 years later.
4. Market Pakistan globally and encourage people to buy Pakistani products. Encourage people to set up manufacturing in Pakistan as an alternative to China. This will piss off China but we have to do it. US is looking for places to move manufacturing out of China to places like Vietnam and India. Pakistan needs to secure a share of US manufacturing, this is a shortcut to increase manufacturing quickly if you don't want to do it organically.
5. The people who get involved in manufacturing business for foreign companies in Pakistan need to transfer this knowledge to local Pakistani businesses and that is when Pakistan's export economy will really kick off. Pakistan must take close notes about where the products they manufacture in Pakistan for foreign companies end up. Specifically pay attention to things like demographics, needs of customers, market size, market growth rate, forecasted demand, competitors, and barriers to entry. Use foreign manufacturing bases in Pakistan as a way to gain inside knowledge and information for business sectors that Pakistan will eventually enter itself and become a competitor. Use this gathered information to make and sell Pakistani exports competitive against other countries.
6. Start with small or medium sized enterprises (SME) and then grow bigger.
7. Increase credit availability, especially for SME's. This is a make or break decision for SME's in developing countries like Pakistan and is critical to increase exports.
8. Understand that the way you export to one country will not work for every country. Things like market specific marketing, demographics, demand, and logistics will change from country to country. Pakistani exports will be more popular in certain countries than others. The bigger the market, the more difficult it is to crack, because larger countries have more negotiating power and you will have to give up more to sell there. Sometimes this works in Pakistan's favor, sometimes it works against.
9. Make an effort to establish Pakistan as a global supplier for businesses. Find out what global businesses need right now and make that, then sign an exclusive deal to supply them.
10. Price competitively and time your market entry perfectly.
11. Simplify regulation standards and cut red tape until you match the global standards of regulation in all market sectors. If you are below global standards, then increase it to global standards. The closer Pakistan's regulation standards are to global level, the more people will buy Pakistani products, and exports will increase. If Pakistani regulations are too high, Pakistani exports will be too expensive. If Pakistani regulations are too weak, quality of Pakistani exports will be bad. You need to find the right balance here, usually this is the global standard, so copy it.
12. To increase Pakistani exports, you will need to combine short term and long term economic policy.
13. When Pakistani exports that become successful, hire more people. Do not fall into the trap that as demand increases, you try to squeeze more out of the same number of employees. You will have a hard time keeping up with export demand and buyers will start to look elsewhere.
As far as imports go, a smart move would be to buy anything expensive right now during COVID-19 economic recession. For example, let's say PIA wants to buy new 787's, instead of waiting, they should buy new planes right now because it will save them money in long run. Boeing and Airbus are absolutely desperate to sell any airplanes right now because many airlines are cancelling their orders and losing order books. Many of the airplanes that Emirates flies today were bought right after 9/11 when airline demand crashed and Boeing/Airbus got desperate for customers. PIA can buy planes on cheap terms for whatever price it wants right now.
Oil is another good example. Oil is cheaper than water right now, anybody with a functional brain cell should be buying, hedging, and stocking up on as much oil as possible right now for the future because oil will get a lot more expensive when economy recovers. To Imran Khan's credit, he said that Pakistan has done this and gotten a lot of oil at a dirt cheap price, which is good news.
Thanks for Nawaz and Zardari, they destroyed CPEC by taking loans and got pakistan in quagmire where beggars cant be choser... the current govt has to take a balancing act....
Some parts of CPEC need to be renegotiated to be cheaper or on better loan terms.
China needs CPEC as much as Pakistan so we have more leverage and room to negotiate than people think.
Imran Khan has started renegotiating some of CPEC on better terms from Nawaz era but Imran Khan needs to finish the job and renegotiate all of CPEC from top to bottom and get some more concessions and better terms from China. Think of it like refinancing a mortgage.
