The economy of a country defines its position at the International level. The relations of the United States with China are uncertain due to former reservations over China’s economic developments. The United Kingdom quits European Union to be Independent in its economic decisions. Yemen and Sudan can’t make their decisions independently because of their low economic growth. The former UK Prime Minister David Cameroon once added “The economy is the start and end of everything. You can’t have successful education reform or any other reform if you don’t have a strong economy”.
If one looks at the economy of Pakistan it is yet to be strong since its independence. There are multiple reasons which have prevented the economy of the country on the right track. These reasons are incompetent governance, mismanagement of the facilities such as water and power, less industrialization and digitalization, corruption, militancy and terrorism, low standard of education and unemployment of the youth, no tax-paying by the wealthiest, unbalance exports and imports, and uncountable more.
All these reasons have not allowed the economy of the country to flourish. This makes the country dependent on the IMF, World Bank, and Asian development bank and the assistance of developed countries like the US, Saudi Arabia, and China. Pakistan returns their money with a high-interest rate which negatively impacts the economy and masses particularly, as the recent example suggest, Pakistan ranked the highest inflation in South Asia since IMF handed over a $6 billion bailout package to the PTI government in 2019.
While the economy of the country was already struggling the surge of COVID-19 hit it very negatively. Pakistan, for the first time after 1952, reported its GDP in negative figures, -1.5 in 2020. From the 1960s to the 1980s, the average GDP growth rate of Pakistan was 6.8, 4.8, and 6.5 percent respectively. In 2018, the GDP growth rate stood at 5.8 percent and in 2019 it extremely drops to 0.9 percent. As per GDP per capita (per person) is concerned it was $83 in 1960, $1,482 in 2018 and it fell down to $1,284 in 2019. And in 2020, with the closing of the economic activity due to lockdown, the figures of per capita further fell to $1,130.
The decrease in per capita and high rate of inflation has increased poverty in the country. In 2018, there were 70 million people below the line of poverty, now they are nearly 90 million. The rise in poverty will also create hurdles for Pakistan to achieve its target for overcoming poverty. The country has pledged to end poverty, protect the planet, and ensure peace and prosperity till 2030, under the platform of Sustainable Development goals, an initiative taken by United Nations members States in 2015.
The debt and liabilities of the country have surged from 30 trillion in 2018 to 45 trillion, whereas the exports have decreased from $30.7 in 2013 to $28 in 2018-2020. However, the country has seen a positive indication in foreign direct investment and foreign exchange reserves, which has grown to $2.56 and $12.9 billion respectively in the fiscal year 2020.
To absolve all these economic problems the country needs to invest more in quality education. Most of the graduates are untrained and have no skills who don’t know how to perform in the market. This has increased unemployment in the country. The education allocation in Pakistan is less than 2 percent lower than the allocation of Bangladesh, which is 4 to 5 percent. The government must increase the share of education in the fiscal year budget to produce the creative students who in turn will generate more revenue for the country. There is a famous quote of Bill Owens who said, “A strong economy begins with a strong, well-educated workforce”.
Good governance is also a key factor in a strong economy. To make it’s economy stable the country must improve the standards of its governance. One can’t deny the fact that South Korea copied and implemented the “five-year plan” of Pakistan back in the 1960s. Now they are more economically stable than Pakistan. Together with it, the country ought to make its agriculture industrial-oriented and imposed direct taxes on the wealthiest of the country.