Economics & Business Pak Affairs

Zardari faces Herculean task of reviving economy

Islamabad: The newly elected President Asif Ali Zardari is facing extremely difficult task of bailing out country of the current political and economy mess. He should take right decisions without any further delay as whole country is sinking into poverty. SOS messages have been sent to friendly and brotherly countries who have strategic, economic and ideological interests in Pakistan. These calls are awaiting any meaningful response. It is getting hard to stay afloat, said Dr. Murtaza Mughal, President of Pakistan Economy Watch on Sunday. “President has come to power with the help of a number of parties having divergent views on many issues. He is bound to come under pressure on many major decisions relating to militancy, extremism and economy,” he said.

He said that Asif Ali Zardari has become a central figure in war against terror at a time when anti-American sentiment is on the rise. There would be limits to his willingness or ability to cooperate with demanding US agenda. Nevertheless, he will have to take some hard decisions irrespective of the reservations of his allies to avoid a crash as economy is in a nose-dive.

Dr. Murtaza Mughal said that main stock exchange gained 40 per cent last year despite 60 suicide bombings. This proves that economy should be the top priority and other issues must take a backseat.

The situation is not very promising, rupee has fallen almost 25 per cent against the dollar since the start of the year, inflation is 28 per cent and still on the rise, foreign currency reserves are diminishing and the inward investment in non-existent. GDB is to slow this year to 4.8 per cent from 6.4 per cent in 2007. KSE has witnessed a fall of 36 per cent since April.

Pakistan fell 15 positions last year, to 79th position from 64th in business competitiveness. The World Economic Forum’s Global Competitive Index ranks Pakistan 92nd out of 131 countries. The drop in the country’s competitive rankings will have far-reaching implications for reducing poverty, fiscal and trade balances, inflation and improving economic growth.

The business community is loosing ability to compete with counterparts overseas. Musharraf’s tenure as president saw high economic growth and unprecedented privatisation as foreign investment flowed into the country supported by as much as $10 billion in US aid. For his successor, US support will be important in the face of a stagnant economy.

In addition, he will have to prove that he is a better choice. The decline will continue until the investors feel a bit confident. Investors will not return to Pakistan until the political uncertainty is completely reversed.-Pak Economy Watch

About the author

Rubab Saleem

Rubab Saleem is Editor of Pakistan Times

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