25 June, 2021

Saving Disgrace

It's not a basket case yet, but its dependence on overseas borrowings is the economy's undoing

Jitender Gupta
Saving Disgrace
The popular perception is that Pakistan's economy is in dire straits, virtually on the edge of collapse. It is believed the economy needs massive international support for survival and growth, that the country has been living beyond its means and needs to greatly tighten its belt. This impression is probably reinforced by the presence of a stringent imf programme, which has been going on and off for almost the last decade. Most civilian governments found it politically unviable to meet the conditionalities of the imf programme. But the current government has implemented some tough decisions with a degree of success.

In the short run, Pakistan's economic problems stem from its relatively large external debt. In the longer run, Pakistan faces the issues of implementing structural changes to put the economy on a competitive and sustainable growth path and find a niche in world economy. It is indeed placed well to benefit from globalisation provided it can successfully put its debt overhang behind.

The World Development Report gives Pakistan's gdp at around $64 billion...

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