(Asghar Ali Mubarak )
\nISLAMABAD (TNS) The Uraan Pakistan project for economic development and prosperity can be considered a strong source of government commitment, which aims to bring the country to the stage of economic stability in the next 5 years and take its reform agenda forward.
\nThe New Year can be considered important in terms of political stability because the political leadership is determined to move Pakistan forward politically and economically.
\nIf the political leadership’s negotiation process is fruitful, then progress in the economic field will not be stopped. This stability will become a source of economic stability. However, ensuring peace and security is also the responsibility of the government and the state. Especially the increasing trend of terrorism is a test.
\nThe army and other institutions have made a history of sacrifices to eliminate terrorism and extremism in the Pakistani soil and are still working with unity and seriousness.
\nPrime Minister Shehbaz Sharif should get credit for pulling the sinking economy out of the mire in difficult circumstances and moving forward. He undoubtedly had the full confidence of the state in this regard and his economic team also worked.
\nToday, international financial institutions including the IMF and other Middle Eastern countries including China, Saudi Arabia are also seen expressing confidence in the reforms of the Shehbaz Sharif government and all this was possible because instead of getting involved in difficult situations and bitter political situations, he focused on the economic, financial and development process.
\nIt can be said from his governance reforms and initiatives that his active role at the national level can lead to economic recovery, development and taking the country forward.
\nIt was to the credit of the Prime Minister that he kept looking to his elder brother Nawaz Sharif in important and big decisions and at the inauguration ceremony of Uraan Pakistan, he also conditioned the process of economic development with the policies of Nawaz Sharif in the past.
\nLast month, Prime Minister Shehbaz Sharif presented a five-year national economic plan ‘Uraan Pakistan’ to take the country towards sustainable development.
\nMeanwhile the Minister for Planning Ahsan Iqbal has directed all the concerned ministries to prioritize their targets in line with Uraan Pakistan and appoint a senior focal person to maintain constant coordination and ensure progress.
\nChairing a consultative meeting on the Uraan Pakistan Action Plan, he highlighted the main goal of achieving sustainable development, achieving rapid economic growth and identified three important factors for the ministries that can contribute to the stability of the economy.
\nTo strengthen cooperation with provincial governments, Ahsan Iqbal stressed the need to involve stakeholders through a comprehensive strategy and proposed workshops.
\nA statement issued by the Ministry of Planning quoted Ahsan as saying that a shift towards export-led growth is necessary for long-term economic stability. The current export level of $40 billion is insufficient and export growth should be increased to $100 billion. Two-thirds of the country\u2019s exports come from low value-added textile products, which requires a major change in the export system.
\nHighlighting past economic challenges, the federal minister claimed that due to poor governance, the Public Sector Development Program (PSDP) has come down from Rs 1,100 billion in 2018 to Rs 400 billion in 2022.
\nPakistan has agreed to a $1 billion loan with two Middle Eastern banks on terms of 6 to 7 percent interest rate. \u201cWe have moved forward in signing term sheets with two institutions \u2013 one bilateral and the other for trade (finance),\u201d Finance Minister Muhammad Aurangzeb told reporters during an interview on the sidelines of the World Economic Forum (WEF) annual meeting in Davos. \u201cThese loans are short-term or up to one year.\u201d
\nPakistan plans to improve its fiscal position after receiving a $7 billion bailout from the International Monetary Fund (IMF), the first review of which is scheduled for the end of February.
\nThe finance minister said that we will conduct the first formal review of the EFF in the end of February. \u201cWe seem to be in a good position for this review.\u201d
\nThe IMF\u2019s Extended Fund Facility (EFF) provides financial assistance to countries facing serious medium-term balance of payments problems resulting from structural weaknesses that take time to resolve.
\nIn an article published in the World Economic Forum (WEF), Pakistan\u2019s Finance Minister Muhammad Aurangzeb has written that Pakistan\u2019s \u201cinnovative approach\u201d to taxes and economic stability offers \u201cvaluable guidelines\u201d for other developing economies.
\nThe finance minister is currently in Davos to attend the WEF\u2019s annual meeting, which is being held from January 20 to 25.
\nThe annual meeting 2025 provides an opportunity for world leaders to come together to address key global and regional challenges. These include preventing geopolitical shocks, boosting growth to improve living standards, and promoting a fair and inclusive energy transition.
\nIn an article titled \u201cPakistan\u2019s Economic Recovery: A Path to Sustainable and Inclusive Growth,\u201d Finance Minister Muhammad Aurangzeb said that Pakistan has embarked on a revolutionary journey towards economic stability and growth.
\nPakistan has implemented decisive reforms to lay a strong foundation for sustainable and inclusive growth while confronting major challenges. The article says that today the results of these efforts are becoming clear and the economy is showing resilience and new potential.
\nMuhammad Aurangzeb said that when he took over as Finance Minister, Pakistan was facing severe fiscal and monetary policy pressures. Inflation had reached a record 38 percent while foreign exchange reserves had fallen to dangerously low levels as it could have been used to import essential goods like food and fuel.
\nAccording to him, the complex effects of Covid-19 and the devastating floods have caused losses of more than $ 30 billion and these factors have further tested us. A series of necessary reforms were implemented after he took office.
\nThese include stabilizing the exchange rate, tightening monetary policies and controlling inflation through targeted monetary intervention. With the help of the IMF\u2019s $ 7 billion Extended Fund Facility (EFF), we have initiated structural reforms in key sectors such as energy and taxation.
\nThe centerpiece of this effort was \u2018Uraan Pakistan\u2019, an economic transformation plan launched in 2024. The initiative aims to achieve sustainable, export-led GDP growth of 6 percent by 2028 through public-private partnerships, increasing export competitiveness and improving public finances.
\nThe Finance Minister added that the Uraan Pakistan plan also includes addressing key challenges such as child malnutrition, educational outcomes and the adoption of clean energy. By integrating sustainability into our development framework, we are contributing to global efforts to achieve the United Nations Sustainable Development Goals (SDGs).
\nIn June 2024, the government presented a reform-oriented budget that aimed to generate revenue of Rs13 trillion, a 40 percent increase over the previous year. These reforms focus on broadening the tax base by targeting low-tax sectors such as agriculture, real estate and trade, while leveraging technology to enhance implementation and transparency.
\nModernization of the Federal Board of Revenue (FBR) has helped improve tax administration. He further wrote that Pakistan\u2019s economy is on the path of recovery, inflation has come down to 4.1 percent (in January 2025) and foreign exchange reserves are sufficient to cover two months of essential imports. Merchandise exports have increased by 7.1 percent and the IT sector has grown by 28 percent year-on-year.
\nPakistan\u2019s global default risk has decreased by 93 percent, indicating renewed confidence in the country\u2019s financial stability. Local and foreign investors, including global companies like Aramco, BYD and Samsung, are playing their part in this economic recovery, which reflects Pakistan\u2019s potential as a profitable investment hub.
\nThe Finance Minister also said that Pakistan\u2019s current account has been in surplus for several months and investor confidence is at a \u201ctwo-year high.\u201d According to him, foreign direct investment (FDI) increased by 20 percent in the first half of fiscal year 2025. Initiatives like Roshan Digital Account have led to investments of over $9 billion, while remittances have reached a record $35 billion this year. Moreover, Pakistan\u2019s equity market has given a profit of 87 percent in dollar terms, indicating strong investor sentiment.
\nThe Finance Minister also said that Pakistan\u2019s progress has been acknowledged and the three top global rating agencies have upgraded the country\u2019s rating. He added that Moody\u2019s, recognizing the impact of our policy measures, revised Pakistan\u2019s economic outlook to \u2018positive\u2019 in September 2024.
\nThe Finance Minister said that Pakistan is addressing fundamental shortcomings in revenue, energy, public sector enterprises (SOEs) and privatization to exit the cycle of external assistance. Empowering the federal government, reforming SOEs, and promoting export-led growth will strengthen domestic revenue sources and reduce dependence on international funding programs.
\nMoreover, Finance Minister Muhammad Aurangzeb said during a panel discussion at the World Economic Forum that Pakistan\u2019s tax-to-GDP ratio has improved and the debt-to-GDP ratio has decreased, which proves that Pakistan is moving in the right direction. Pakistan\u2019s biggest challenge is the twin deficits of current and fiscal accounts.
\nHe highlighted the need to keep the tax-to-GDP ratio \u201csustainable.\u201d He said that we are between 9 and 10 percent and are now moving towards 13.5 percent through structural reforms. The government is focusing on reducing its expenditure and debt servicing. Pakistan\u2019s debt-to-GDP ratio has improved and has come down from 78 percent to 67 percent, although there is still a long way to go, but we are moving in the right direction. On the issue of debt utilization, the former banker said that I don\u2019t think there is anything wrong with borrowing. The question is what you borrow for, while emphasizing that loans should be used to increase productivity and exports rather than funding subsidies or routine expenditures.
\nOn the path of the country\u2019s economic growth, the Finance Minister admitted that Pakistan\u2019s economic growth has not been consistent. He said that when the GDP growth rate reaches 4 percent, since the economy depends on imports, we lose foreign exchange and a balance of payments problem arises, which forces us to seek help from the International Monetary Fund (IMF).
\nHe said that of course we want sustainable growth, but this can only be possible by making the infrastructure of the economy export-oriented.
\nIn response to a question on the China-Pakistan Economic Corridor (CPEC), he said that the focus in the second phase of CPEC will shift from government-to-government (G2G) cooperation to business-to-business (B2B) partnerships. The government aims to convince Chinese companies to shift their manufacturing units to Pakistan so that they can export from Pakistan.
\nOn diversifying the capital market, Muhammad Aurangzeb said that Pakistan aims to learn from the experiences of Egypt and diversify access to the capital market and improve credit ratings. He said that we are also trying to issue Panda Bonds, as Pakistan wants access to the world\u2019s second largest capital market.
\nIn response to a question about the plan to create local employment opportunities and prevent the exodus of skilled manpower from the country, the former banker said that from my point of view, it is not a debate, so if good opportunities are available for the young men and women of Pakistan, they should definitely take advantage of them.
\nWe have to create the necessary ecosystem, which the government is working hard to provide. The finance minister reiterated that the government is not in the business of doing business. He added that there are countless opportunities for the youth in Pakistan\u2019s IT sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
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