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Pakistan as fastest growing economy

Pakistan as fastest growing economy

According to the media reports, Pakistan is emerging as the fifth fastest economy of the world and is performing better than many developed economies. The renowned Economist magazine suggests that the financial indicators regard Pakistan as the fastest growing economy in the Muslim world with estimated GDP growth at 5.3 percent. However, the country still lags behind India, China, Vietnam, Bangladesh and the Philippines where India is growing at 7.5 percent and others, including China, at the rate of more than 6 percent. The economists project the country’s GDP growth at 5.3 percent for 2017, which is 0.4 percent less than the growth rate of the previous financial year. This shows the country has miles to go to keep up pace with the countries in the region. The growth of the gross domestic product in 2014 was projected as the sixth fastest in the world. However, the country is facing declining exports, energy crisis, security situation and lack of will of the government to introduce structural reforms. Various Muslim economies are facing the same challenges as of Pakistan, including Egypt where load shedding is haunting its industry, political chaos has cost the domestic peace and disturbance in the neighbouring countries is hindering the expansion of its business and trade. On another note, the Malaysian economy is growing at 4.6 percent and Indonesia’s at 5.2 percent.

There are lessons to learn for the Pakistani policymakers with regard to Bangladesh which had half of the GDP of Pakistan a few years ago, but has been growing at 6.5 percent. Bangladesh’s GDP has reached $230 billion, putting it in the middle income countries from the list of the world’s poorest nations. Bangladesh has been achieving a steady growth rate by expanding textile and garment sectors. The Bangladeshi exports remained over $31 billion last year in which garment sector exports contributed over $25 billion. Pakistan’s exports touched $25 billion in 2012-13, but these are nose-diving since then. The government has failed to revisit its economic policies and priorities.

Now all hopes are pinned on the China Pakistan Economic Corridor which is regarded as the game changer. However, the country is in the habit of losing opportunities for one reason or the other. Earlier, the government had planned to set up industrial estates on the sides of the motorways, but nothing happened decades after the operation of the project. Now the government is promising the nation of setting up special economic zones along the economic corridor but it is yet to be seen how it moves forward to implement its plans.