A recently released World Economic Forum’s (WEF) Global Competitiveness Report (GCR) ranks Pakistan at 129 out of 144 economies around the world. The report measures competitiveness of economies around the world on basis of factors such as productivity, innovation and prosperity. Unfortunately, Pakistan has consistently featured among bottom 20 of the 144 economies in this index over past few years. In the latest edition, Pakistan has been placed at the lowest rank among all South Asian countries.
According to the report, corruption and poor governance has hindered Pakistan’s competitiveness on the global landscape. Rampant corruption can be blamed on an ineffective and inefficient legal system in Pakistan. The system is largely biased toward the elite and justice remains inaccessible to the masses because of lengthy legal recourse and high costs. Lack of accountability encourages nepotism and wasteful spending by government bodies. Further, Pakistan is facing some serious economic challenges in the form of double-digit inflation, low savings rate of 13.2 percent of the GDP, high government debt at 63.1 percent of GDP and 8 percent budget deficit. The authorities have also failed to significantly broaden the tax net and increase government revenues for spending on economic welfare projects.
Successive governments in Pakistan have shown a shortsighted approach to development and favored quick-fix measures over long-term solutions to achieve sustainable development. Often, a populist approach is adopted to ensure that the government’s vote bank remains preserved and it does not fall prey to any mass movement. A persistent energy crisis has stifled economic growth and government’s strategy to deal with it reflects poor planning and inadequate financial mismanagement.
The country’s poor law and order situation, mainly due to war on terror and other acts of targeted killings, have also hampered economic activities throughout the year. The volatile law and order situation has forced investors to sit on the sidelines as the highly politically influenced police services remain ineffective in curbing crimes in major metropolitan cities of Pakistan. There is a dire need to invest in equipping and training the law-enforcement bodies on modern lines so that they are able to ensure a secure business environment. It is high time that civil services, like police, are depoliticized and their appointments are made purely on merit to make them more effective.
Pakistan will continue to lose its competitive edge in global markets until the government prioritizes investments in the country’s basic pillars of infrastructure, education and health care. It is a shame that these sectors, that directly improve the quality of lives for all citizens, have remained neglected for a long period of time. A large chunk of the country’s budget is allocated to military spending and debt servicing at the expense of public sector development programs. These areas also form the basic requirement for promoting efficiency in the country’s overall labor market, financial markets, technology adoption and innovation. Any hopes for sustainable growth hinge on the government’s ability to dedicate larger funds for boosting technical education and primary school enrollment rate, reducing child mortality and leveraging the technology sector. Pakistan needs to make a concerted effort to address these gaps and then focus on building a capacity to innovate through technological advancements. By losing economic competitiveness, Pakistan will dampen its chances of achieving sustainable growth and further risk tarnishing its global image.
