April 8, 2014
When Pakistan elected President, Mamnoon Hussein in June 2013, the country was in economic peril; it was experiencing slow economic growth, job shortages, and corruption was the accepted norm. However, after only eight months in office, the new Administration has introduced a series of economic measures and reforms, and has, thus far, been successful in turning the country’s economy around. Over the course of the year, government revenues have increased 17%, exports are up 6.2%, GDP has risen 4%, and the country’s deficit is currently below government targets.
While speaking in Washington, DC, Pakistan’s Minister of Finance outlined a series of new reforms that will boost the country’s economy, strengthen its infrastructure, and reintegrate it in the global economy. For the first time in seven years, Pakistan is back on the international bond market, opening the country to further outside investment, and strengthening the Pakistani currency. Further, Minister Dar also detailed plans for the Pakistani government to sell some of its state-owned enterprises (SOE’s). According to Min. Dar, 31 SOE’s have already been approved for privatization – the majority of which are based in the energy and finance industries.
In addition to these domestic reforms, Pakistan is also making plans with a number of international financial organizations – primarily the IMF and World Bank – to strengthen the country’s economy and civil society by concentrating on the “4 E’s”: Energy, economy, education, and extremism. It is Min. Dar’s hope that loans from the World Bank will allow companies to further tap into the country’s large hydrocarbon reserves and kick start a number of energy products; building up the country’s revenue while also addressing its energy shortfalls. In order to combat extremism and improve education, having a modern and reliable energy infrastructure is key. In addressing these domestic concerns, the government is also looking to strengthen the country’s education systems by increasing spending from 2% to 4% of the country’s GDP and also doubling the amount of money that goes into SME training programs. By strengthening these domestic programs, Min. Dar hopes to provide Pakistan’s youths with the skills needed to succeed in a modern economy and an alternative to extremism.
Should the country’s development continue to go smoothly and as planned, Min. Dar hopes to see Pakistan be self-sufficient, aid-free country within the next five years. As he noted, Pakistan has the natural resources and human capital needed to succeed in the modern global economy – it just needs to finally actualize that potential. The country cannot succeed on the backs of the military and a few SOE’s. In order to succeed, Min. Dar and the new government in Pakistan are creating opportunities for all citizens to have access to education, energy, and prosperity.