New Delhi, Nov 12 (IANS) Pakistan’s economy remains trapped in a cycle of weak growth, low investment and rising debt despite signs of macroeconomic stabilisation, according to a report.
A report by Dawn warned that the country risks falling further behind regional peers unless it shifts towards investment- and export-led growth.
Pakistan’s per-capita GDP growth has stagnated in recent years, while recurring balance-of-payments pressures have repeatedly forced the country to seek support from the International Monetary Fund.
Pakistan’s economy is heavily driven by consumption, accounting for about 82 per cent of gross domestic product, while investment remains at roughly 14 per cent, well below levels seen in countries such as India, China and Bangladesh, according to the report.
Weak investment has also constrained industrial expansion and export competitiveness, it added.
“Capital droughts in export sectors cause dollar and job droughts. From a peak of 17 per cent in 1992, exports now barely reach a tenth of our GDP — South Asia’s second-lowest share, below even Afghanistan’s,” according to the report.
Moreover, Harvard’s Economic Complexity Index ranked the country 89th among 145 states.
“So our exports face intense competition but return little. Exports rarely cover imports, creating large trade gaps,” it added.
Pakistan’s extreme poverty rate has risen and that the gap with regional peers has widened as income growth has slowed.
Pakistan’s public debt stands at about 73 per cent of GDP, while a significant share of federal spending goes towards servicing interest payments, limiting resources available for development and growth-enhancing investments, he said.
“A weak economy reflects perverse politics. Poor countries need both a developmental and a welfare state. Ours is a parasitic and apathetic state run by rapacious rulers. This isn’t a tragedy of ineptitude alone: willing rulers can easily hire merit. It’s a deliberate design by kleptocrats who may lose their wealth and power if there is real progress,” the report said.
–IANS
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