Candid View About the Positivity in the Pakistan Economy

So here it is, the Crumbling Economy, The Insolvent Country, The Land of Inefficiency.

Really?

Looking at the size of more than 20 million people, it seems that around $300 billion in Gross Domestic Product (GDP) or total output is way too nominal. Yet, my general opinion is that Pakistan’s economic dynamics must be considered before arriving at any conclusion.

Often overlooked, the major part of the Pakistani economy comprises the undocumented or informal section. It has been a culture to do dealings through spoken words / verbal promises, rarely involving receipts. Receipts are only engaged by big companies/dealers to assist in auditing purposes. Thus, a large part of the economy remains informal and undocumented. Many experts believe that Pakistan’s GDP triples if one considers the undocumented economy, taking the figures to nearly a trillion dollars, the size of the top emerging economies of Thailand, Malaysia, and Singapore combined.

The country’s saving pattern is a lot different from that of any Western country. People prefer to keep most of their earnings at home for ready use. Banks are avoided by many because of the belief that the “interest” is prohibited in Islam, the religion of the masses. Also, a large amount of gold is held by many females in their houses or safes to be bequeathed to their daughters at wedding ceremonies.
The tax-to-GDP GDP ratio is oGDP ratio side because of the poor tax collection system and people’s unwillingness to pay taxes. Yet, a charity collection remains incomparable. The existence of charity organizations like the Edhi Foundation, Chippa Foundation, and Sylani Welfare Trust remains awe for many. They require millions and millions to operate daily. The continuation and ever-increasing scale of operations of these types of trusts is a bigger food for thought for many economists, as one does not expect such donations from people of a feeble economy.

If the Pakistani economy is so disturbing, why don’t the multinationals, the scrutinizers and forecasters of the economic trends, consider shifting their resources away from Pakistan? Or, more importantly, why aren’t they getting losses? It is a wonder that few or no multinational firms consider leaving Pakistan once they start their operations there. Take the Capital markets, the banking sector, the hotel chains, the auto industry, and the FMCGs; multinationals are taking large sums away as profits each year.
And then they complain that Pakistan has an unstable economic system!!

Ever noticed the budget distribution of the country?

Around 60% of the budget is allocated to the Defense sector; the smaller half is used in every other economic sector. Wouldn’t the development be unimaginable if we shifted our focus and resources away from the defense sector?
Forget that many advanced economies allocate as little as 1% of their budget to the defense sector.

The country’s inflation has been stagnant over the years, unlike the economies of many other developing countries. This also proves that the Pakistani economy is not over-immune to the movement of the developed economies. A brilliant example of the country’s adaptability is the steady growth rate of the economy, even during the oil price war between OPEC and Russia (2013 onwards).

Pakistan is considered so important globally that it wouldn’t be wrong to say that Businesses worldwide secretly admire operating in Pakistan. The “China-Pakistan Economic Corridor” (CPEC) is the most recent example of it. The Chinese firms will be investing more than 46 Billion Dollars in Pakistan, which will surely give a sharp push to the so-called lethargic economy. Not only this, but employment would get a go as well. The local industry would also be boosted without a doubt. And most importantly, the CPEC would set an example for the world by unveiling the true potential and scope of Pakistan’s economy.

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Pakistan is enriched in Gas, Coal, and other natural resources that need to be explored and brought to us about the economic factors within.
Perhaps they are being sustained for the future, so they may get the best price once the whole world has depleted its resources.

The country’s major population comprises the youth, and prominent among them are those pursuing their higher education. Yet, it remains a dilemma that they are intentionally or unintentionally being trained to work for others rather than starting their ventures. However, trends are beginning to change; unemployment has begun leading the lot towards taking risks and getting out of their comfort zones. Time is not far when Entrepreneurship becomes a trend among the youth and the emigrants start returning to Pakistan.

The political scenario has matured a lot. People have started believing that Democracy is the only solution to the country’s pain. The army is gradually withdrawing its political intentions. Each government is completing its lawful tenure, and thus, implementing economic policies in the medium to long term is becoming much more possible.

Pakistanis are also renowned for their outstanding talent and intelligence. They somehow find one way or another to do their desired things, given the least resources. This ability of Pakistanis has made many scientifically impossible things possible for Pakistan.

Thus, it is clear that Pakistan is not as weak an economy as it is blamed to be, yet it is just the difference in Pakistan’s economy’s underlying forces that disguise its true power. If not an Asian Tiger, Pakistan is no less than an Asian Horse whose real strength and position can only be visible when one considers the facts rationally and looks at the ground realities.

The condition of the Pakistani economy depends on how you look at it. You may see the doughnut, or you may see its hole.

Many experts believe that Pakistan’s GDP triples if one considers the undocumented economy, taking the figures to nearly a trillion dollars, which is the size of Thailand’s top emerging economies, Malaysia and Singapore combined.