The establishment has shown concerns and the resolve to streamline the deteriorating economy of the country. Earlier the political governments were shown the door, inter alia, on the charge of economic mismanagement. In June 2019 the government established the National Development Council (NDC) which includes Chief of Army Staff as one of its members. Later the DG ISPR, while deliberating on the Kashmir issue on 4th September opined on the economy saying “it has suffered a cancer which cannot be cured by administering a pill to cure fever”. It requires a lengthy and thorough procedure for treatment which is specially required to cure a lethal disease”. Moreover, the COAS during his address on the Defence and Martyrs Day emphasized that Pakistan has fulfilled its responsibilities in the war against terrorism and “our fight now is against poverty, unemployment and economic backwardness following successfully confronting the menace of terrorism”. The economic turmoil in the country now appears to be getting a bigger issue than Kashmir itself.

Establishment’s concerns and resolve on one side are very encouraging and promising, however, they raise many important questions viz. (i) do the politicians lack the capacity or the will to stabilize the economy which is in doldrums, (ii) how and what measures will the establishment adopt to revive the economy so that it bounces back. (iii) what framework will be adopted to achieve the objectives broadly declared by the COAS, (iv) will the present economic team and bureaucracy be used to cure the economic cancer, and (v) what will be the way forward.

Economic managers today are lost in the quagmire as to how to prioritize the economic revival of the country. The present priority seems to be meeting the day to day financial requirements and debt servicing by resorting to friendly countries, international donors, arbitrary tax measures and increase in energy tariffs and POL prices which are proving counterproductive. Hardly any policy and guidelines for taking out the country from the economic morass and turmoil were witnessed during the current regime. The economic indicators reveal the gravity and paucity. The economy apart from mismanagement and poor governance has adversely been affected by the war against terrorism, the fallouts have been disastrous. Moreover, the economy, during the past and even now is governed by IMF and the World Bank conditionalities. With foreign debts now reaching US$ 100 B, dwindling exports, increasing fiscal deficit and poor domestic revenue mobilization and unmanageable trade imbalance, unstable Rupee Dollar parity etc. what indigenous policies can be implemented is a big question itself.

In the order of priority two more economic ailments need to be addressed. The first being what policy and strategy the country needs to adopt to retire its soaring foreign debt liabilities, which will certainly be an uphill task. This would require some fundamental and drastic decisions to reorganize and restructure many organizations. The second aspect which needs immediate attention is the control of artificial hyperinflation which is affecting all factions of the society specially the ones living below the poverty line.

COAS commitment to fight against poverty, unemployment and economic backwardness requires a national economic agenda supported by foolproof policies, competent, effective and a dedicated implementation and monitoring team. These have to be in line with the international obligations and trade and industrial norms acceptable to rest of the world. Such policies and measure are well entrenched in the Marrakesh Agreement Establishing the World Trade Organisation (WTO). The Agreement states that the economy will be conducted with a view to raise the standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services allowing the optimal use of the resources with the ultimate objective of sustainable development. A country under the WTO charter can take measures consistent with its respective needs and concerns at different levels of economic development. The WTO provisions on Governmental Assistance to Economic Development recognizes that for the attainment of the above objectives the member countries can effectively engage in progressive development of their countries, particularly those countries which can only support low standards of living and are in the early stages of economic development.

The concept of early stages of development does not only apply to members which have just started their economic development but also to countries the economies of which are undergoing a process of industrialization to correct excessive dependence on primary or low value-added products. Although WTO supports trade liberalization and free trade, its rules recognize and provide adequate measures which developing countries like Pakistan can take for pursuing economic development, especially in consideration of the war against terrorism and its fallout. Moreover, Pakistan has low wages which have peculiar problems, industrial base is not large enough to produce export substitutes and surplus with diminishing job opportunities. Adoption of all such measures are legally protected and permissible under the WTO regime and the developing countries can benefit from them.

The constitution of the National Development Council (NDC) reveals that with the exception of the COAS the members of the Council do not include any new member, it also does not have any applied economists or technical experts as permanent members. Nor the task forces constituted earlier by the government on the economy so far seem to have contributed much to the process. The economic indicators already are significantly evident of stagnation and retardation of the economy during the last one year. Under the given circumstances Pakistan needs to develop an all-encompassing “national economic agenda” taking all factions of the society on board with no opposition, politics and hinderances. Not much rocket science would be required to put the economy back to track and the NDC should enforce the agenda.

The academic economists analyze the situation with a purely theoretical perspective without considering the ground realities, suggesting no practical measures to take the country out of the current economic morass. The economic managers with applied background, stake holders and technical experts should be tasked to prepare the national economic agenda. The agenda should, inter alia, formulate long term debt retirement and domestic revenue mobilization, trade, industrial and tariff policies which could direct the scarce resources towards desired prioritized national objectives.

The WTO Agreement on Governmental Assistance to Economic Development enables countries to (a) maintain sufficient flexibility in their tariff structure to be able to grant the tariff protection required for the establishment of a particular Industry and (b) to apply quantitative restrictions for balance of payments purposes in a manner which takes full account of the continued high level of demand for imports likely to be generated by its programme of economic development. Consequently, Pakistan’s economy which can only support low standards of living and is in the early stages of development shall be free to temporarily deviate from the provisions of other Articles of this Agreement and as provided in its Sections A, B and C for restructuring its economy.

The review of poorly negotiated tariffs under earlier free trade agreements and careful future market access negotiations with Turkey, Thailand and Korea etc., considering the principles of (i) reciprocity and mutually advantageous basis, (ii) individual needs of the country and industry, (iii) the need for a more flexible use of tariff protection to assist economic development and the special needs to maintain tariffs for revenue purposes, and other relevant circumstances, including the fiscal, developmental and strategic needs is of immense importance.

Development of an export policy with increased market access supported with domestic vocational and educational support and increased international competitiveness for conforming goods to international mandatory standards etc. is the need of the hour. Revival of sick industrial units and optimization of capacity utilization cannot be ignored and should be one of the priorities of the agenda. One of the major factors of sick industry is substantial under-invoicing by commercial importers and certain domestic industrial units causing colossal revenue loss and clandestine transfer of dollars to the exporters causing Rupee depreciation and adversely affecting the indigenous industry. Other impediments include arbitrary increase in energy tariffs and POL prices.

The other areas which need to be covered under the national economic agenda pertain to the formulation of policies which encourage fresh industrialization and direct foreign investment in the country. Policy to restructure and reform the bleeding government organizations and corporations should also be in the sight while formulating the national economic agenda apart from across the board eradication of mega economic corruption and rampant evasion of federal taxes and duties.