Pakistan: Economic Challenges and Solutions

Economic Action Plan

By Muhammad Omar Iftikhar | June 2023

Pakistan has been facing unprecedented economic challenges that seem to augment with each passing year. The men at the helm of affairs are well aware of these predicaments, yet actions are not taken on time. There is a need to comprehend the economic direction and take Pakistan out of its perpetual crisis. Dr. Ishrat Husain has presented solutions to Pakistan’s economic problems in his book titled, Pakistan: Economic Challenges and Solutions.

The book explores at great length the solutions that will bring Pakistan out of its economic quagmire. Most importantly, the fourteen chapters of the book enlighten the readers about key areas and eras of the country’s economic scenario and fabric. Since the 1990s, Pakistan is struggling to keep its economic activities alive. The relative performance of Pakistan’s institutions of governance has been the reason behind the rise and fall of the country’s economy. The institutions that paved the way for flourishing Pakistan’s economic sector in the first four decades have now corroded. Examples of such institutions that led Pakistan into the new era and are now facing predicaments of their own include the PIDC, PICIC, IDBP, ADC, WAPDA, and the PIA.

Dr. Husain identifies the root causes of Pakistan’s fiscal and balance of payment crises, including overreliance on borrowed funds, losses incurred by state-owned enterprises, prioritizing conspicuous consumption over savings and investments, neglecting human capital development and science and technology, and accumulating circular debt in the energy sector.

In terms of structural reforms, the author emphasizes the devolution of powers from the federal to provincial governments, the need for objective and impartial civil servants, modernizing government management and regulatory practices, improving educational standards and curriculum, providing capital access to all segments of the population, promoting human capital formation, expanding the tax base, and ensuring transparency in sectors like construction, railways, real estate, ports, airports, highways, media, oil, and gas.

The book is a carefully drafted policy proposal to facilitate decision-makers and the government to take Pakistan to a brighter future. Dr. Husain uses his vast experience, focused approach, insightful analysis, and realistic discourse to not only highlight economic problems but to bring to light their causes and effects. His investigation and exploration of economic predicaments do not confine to the elements of a single genre but bring to the fore how it impacts growth, macroeconomic stability, public finance, banking, debt, trade and investment, and foreign relations, among others.

The author’s wise judgment and wisdom enables him to write this book with a focused approach. The content is of paramount significance for academicians, researchers, and corporate executives alike. He educates the readers in the section “Politics and the Economy” by explicating the economic discourse in Pakistan that has become partisan and polarized.

Dr. Husain’s writing style is accessible, yet scholarly, as he presents complex economic concepts, their implementation, and implications, and how to steer through the impending challenges. He draws on a vast array of historical and contemporary data to demonstrate the economic shortcomings and the various areas that need immediate action for economic revival.

The author proposes a set of policy solutions for addressing the problem of inequality. He advocates for progressive taxation, higher inheritance taxes, and a global wealth tax, among other measures, to reduce the concentration of wealth and promote greater economic equality.

Pakistan: Economic Challenges and Solutions is a must-read for those who are interested in studying the trend, causes, and effects of economic policies, the way forward, and the solutions to the looming crisis. The book is akin to a step-by-step problem identification and proposed solution guide to be read and understood by government officials, policymakers, decision-makers, businessmen, investors, civil society, academicians, researchers, and the common man. Grounded in rigorous economic analysis and supported by historical evidence, Dr. Husain’s proposals make a compelling case for change, aiming to promote greater economic equality and bring Pakistan’s economy out of its many dilemmas.