Brigadier (retd) Aslam Khan, Chairman of Pakistan Economy Watch (PEW), said on Monday that the new government should try to improve the country’s investment climate. He said high electricity and gas tariffs and record interest rates discourage local and foreign investors. Aslam Khan said that business people are not ready to invest in Pakistan, which has the most expensive electricity and gas and interest rates ranging from 23 to 25 percent. He said that international banks are refusing to lend to those planning to invest in Pakistan and encouraging them to invest in India and Bangladesh on soft terms, which is unfortunate.
He said economic affairs cannot be conducted as before, and extravagant expenditures cannot be made. The time has come to decide on merit; therefore, politicians should be kept away from the Ministry of Finance, and the Planning Commission should not be put at the mercy of a politician.
Pakistan lacks funds; therefore, he demanded that the practice of creating new institutions be stopped.
Aslam Khan said that the National Highway Authority was created because some influential people were obsessed with building roads by taking huge loans. They did not want interference from the Planning Commission or other institutions, creating a new institution.
The deficit of the NHA has exceeded twelve hundred billion rupees, so these failed institutions should be closed down.
He said the average growth estimate 2024 is two percent, presenting a weak economic rebound. The threat of inflation is quite natural and is predicted to remain higher than 20 percent. The rate of unemployment and poverty has increased, and the trade deficit is putting pressure on reserves.
Risks connected to subpar investment, low exports, low productivity, and a crisis in the energy sector hinder sustained recovery. Suppose the tax system’s shortcomings are fixed. In that case, it will be easier for the government to raise the necessary funds for development expenditures.
Pakistan’s external payments demand massive financing that goes above the present SBA. Debt sustainability is highly risky, and the net debt stock is anticipated to be high at 70% of GDP.
He said that in the grim economic situation, some political actors have conspired to bring under their control an institution that earns hundreds of billions of rupees annually, which should be reversed; otherwise, that institution will also be destroyed due to corruption.
He said that just as chartered democracy has nothing to do with democracy, the chartered economy cannot improve the economy because investors decide by looking at ground realities instead of fancy words.
Speeches and slogans can fool people. But not the investors, he said.