LAHORE: Pakistan’s economic story is one of hope and despair. Those at the helm of affairs think that by taking certain steps, the economy will start galloping. Sadly, this is not true, since we do not need a few steps but several to get the economy going.
There are many loopholes in the system. The economy is about ensuring the well-being of the entire population. The planners must ensure that workers in all sectors receive fair wages. A fair wage is generally considered to be compensation sufficient to provide workers with a decent standard of living, taking into account the cost of basic needs such as housing, food, healthcare and education.
Ordinary Pakistanis know that Pakistan is a poor country where it is impossible for most of them to make ends meet, but our ruling elite operates with the mindset of governing a wealthy state. This is why the miseries of ordinary Pakistani citizens continue to increase while the luxuries of a few fortunate individuals have multiplied, because our system favours the elite despite some cosmetic claims by the state that it is taxing the rich.
We formulate attractive investment policies, but they are not sufficient to attract investment from the diaspora. The concessions offered on large projects, with guaranteed returns on investment in dollars, are the biggest drawback for ordinary investors. Overseas Pakistanis are not ordinary investors, but they also demand a guaranteed rate of return on their investments, which is a difficult proposition to meet. Instead, they invest in real estate and manipulate the capital market to make money, although most of their remittances are meant to help their loved ones living in Pakistan.
The dilemma with Pakistan’s economy is that the formal corporate sector shows growth and social compliance, yet unemployment remains high, fueling social unrest. This reflects a partially regulated economy in which different sectors face uneven challenges and opportunities. We lack an entrepreneurial culture because our society favours the rich and influential. Entrepreneurship thrives when high-impact entrepreneurs operate within tight-knit networks.
Alleviating poverty in Pakistan, where 50 per cent of the population is poor, requires solid economic reforms, accountability and a strong social safety net. Empowering communities and leveraging technology to enhance transparency can help prevent corruption and ensure that aid reaches those who need it.
We may be a hard state for terrorists, but as far as the economy is concerned, ours is a soft state in which few rules are ever enforced. Everyone is aware that the implementation of rules and regulations in Pakistan is lax. Unemployment increases not just because of job losses but also due to a significant decline in new job creation. The economic environment in Pakistan is not conducive to entrepreneurial activity, which is crucial for generating new employment opportunities.
Ensuring shelter for citizens is one of the state’s primary duties. This can be achieved by formulating policies that enable the homeless to obtain housing loans with instalments roughly equivalent to the monthly rent they would otherwise pay. This has been partially achieved, but banks have not been given the power to evict loan defaulters without going through lengthy court proceedings if they fail to pay two instalments.
Globally, the average household size varies, generally ranging from 2.5 to 6 people, depending on the region. In high-income countries, it is around two to three people per household because of smaller family sizes. In Pakistan, the average household size is around six people. Based on this figure, the country needs 40 million houses. Given the existing housing shortage and the growing population, Pakistan will need to significantly increase housing construction to meet this demand.
