Pakistan has slipped by three spots on the Global Competitiveness Index released by the World Economic Forum (WEF), ranking at a dismal 110 out of 141 countries and the lowest in South Asia.
The index is a guideline for policymakers to look beyond short-term and reactionary measures and assess their progress against a full set of factors such as infrastructure, macroeconomic instability, and financial systems that determine productivity. Even the United States, despite remaining an innovation powerhouse, slipped to second place just as a result of Trump’s trade wars.
The current year has been rather difficult for Pakistan’s economy. The government received a bailout from international lenders, GDP growth rate has fallen, and rupee depreciation against the dollar has pushed up food and fuel prices along with a rise in utility prices accompanied by changes in duties and taxes. In such circumstances, consumers and businesses are facing the adverse effects of an economic downturn.
The business community is now losing its patience and has held meetings with political and military leadership. Last month, the prime minister gave assurances to provide all possible facilities to businessmen. They were not impressed and recently met with the army chief with a multitude of complaints discussing the need for an economic revival. The business community has criticised government policy for not being business-friendly.
The WEF’s report states that most economies are far from the ideal competitiveness ‘frontier’ and has offered advice which even Pakistan should take. It suggests that economies should focus on fiscal rather than monetary policies, structural reforms and public incentives while allocating more resources to the competitive factors.
Pakistan needs investments that enhance productivity such as infrastructure, R&D, and skills development in the workforce rather than injecting money in the economy. The country also needs to build its capabilities to deliver through digital and e-governance platforms. The adoption of ICT and online financial systems should be part of public policy.
The government has taken significant steps to ensure economic stablisation aimed at containing consumption and increasing productivity. The economy is expected to stabilise in a year’s time. The world is getting increasingly competitive and as the report states, the next decade will be defined by building shared prosperity and transitioning to a sustainable economy. The choices we make will lead us to this journey of growth, inclusion and sustainability.
