Pakistan Economy Watch (PEW)

Govt regional cooperation toil lauded: PEW

New regional economic initiative demanded
Importance of intra-regional trade highlighted

The Pakistan Economy Watch (PEW) Chairman Brig. Muhammad Aslam Khan (Retd) on Thursday lauded the efforts of the government to improve regional cooperation terming it key to the prosperity.

Pakistan’s most important relations should be with its neighbouring countries like Afghanistan, India, Iran, and China instead of the western countries, he said.

Pakistan is giving too much importance to some western countries which they do not deserve as we are not as much dependent on them as believed, he added.

Brig. Muhammad Aslam Khan (Retd) said that intra-regional trade is extremely important for boosting economic growth and prosperity in the region will remain a far cry unless Pakistan and India become closer.

A World Bank report estimates that trade between Pakistan and India is a mere $2 billion whereas, without trade barriers, this could reach $37 billion as both the countries continue to maintain long, sensitive lists of items on which no tariff concessions are granted he said.

He said that political tensions and non-tariff barriers are also playing their role, cargo trucks from either side cannot move beyond their border zones while visa regimes restrict the mobility of people between the two countries.

Pakistan is no longer an isolated country, friendly nations are pouring in aid, grants, and investment and it is high time to exploit the potential of trade cooperation with Iran and Turkey in sectors like barter trade, tourism and oil and gas using seaports and rail and road infrastructure.

Pakistan Iran and Turkey are natural allies and can work together through a collective economic initiative to improve the plight of masses and counter unjustified sanctions.

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Debt skyrocketing but manageable: PEW

PEW rules out the possibility of default

The Pakistan Economy Watch (PEW) on Sunday said foreign and domestic debt has been climbing sharply to an all-time high but it is still in manageable limits.

The country’s total debt stocks have jumped to over Rs26.5 trillion but the government has the ability to tackle it, it said.

The government is facing larger economic challenges such as repaying mounting foreign debt amid rapidly declining foreign currency reserves necessitating vital reforms, said Dr. Murtaza Mughal, President of PEW.

The debt burden has touched alarming proportions due to the relentless borrowing by the former government, unabated imports, sliding exports and other factors but it will not bankrupt the country, he added.

He said that foreign exchange reserves are under pressure while repayment of loans will eat up a large portion of government earnings which can be countered through good growth rate and enhanced exports.

Dr. Murtaza Mughal said that the former governments added billions of dollars the external debt which should be tackled urgently.

He said that current account deficit has touched worrying proportions while the imports have added to the ballooning deficit.

The country would need to bridge the trade gap for which a loan of eight billion dollars is required from the IMF.

He said that country can avoid another loan from IMF to bridge deficit if it undertakes serious reforms without further delay.

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Military courts necessary for the national security: PEW

Terrorism brought down but it is not over
Lack of consensus to devastate masses, economy

The Pakistan Economy Watch (PEW) Chairman Brig. Muhammad Aslam Khan (Retd) on Thursday said extension in the life of military courts is necessary for the national security as the menace of terrorism is not over.

The military courts have helped reduce terrorism substantially which has improved the security situation, the image of the country and the economy but the decisive victory is yet to be achieved, it said.

This is a matter of life and death for the country, therefore, the political parties should take a decision in the broader national interest raising above the unimportant considerations, said Brig. Muhammad Aslam Khan (Retd).

He said that opposing extension in the duration of military courts amounts to supporting the terrorists which is against the national interests as it will make the life of masses miserable and put additional pressure on the economy.

Increased terrorism will deter investment and promote flight of capital which will hit our economy hard adding to the problems of the poor, he warned.

He said that military courts were not needed if the former and present governments had initiated judicial reforms and strengthened the judicial system but it was conveniently ignored.

Amid the national crisis, the country lacks another instrument to punish the terrorists captured by the state except for the military courts, he observed.

The country cannot be left at the mercy of terrorists to please a handful of people, he said, adding that lack of consensus on the issue would be unfortunate for the country.

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Rising circular debt can devastate the economy: PEW

Govt should develop a foolproof reporting system

The Pakistan Economy Watch (PEW) on Sunday said circular debt is quietly rising to an extent that it has become a threat which can devastate the economy.

The infamous debt has marched across Rs1400 billion but a serious effort to tackle the issue is yet to be seen, it said.

The issue of circular debt should be resolved on war-footing lest it becomes a tsunami for the troubled economy, said Dr. Murtaza Mughal, President PEW.

He said that the circular debt was Rs922 billion in November which has now climbed to over Rsw1400 billion while the reason behind fast escalation cannot be ascertained at the government level.

Dr. Murtaza Mughal said that concerned authorities are not interested in containing power theft, reducing losses and improving recoveries but they prefer to hide the facts from the government despite knowing the threat it poses to the economy.

The government should develop a foolproof system for monitoring the debt, determine its reasons and take steps to overcome it.

Those who think that burdening masses is the only way out are wrong as it is increasing poverty and hitting industrial and agricultural production while making exports uncompetitive in the international market.

It may be noted that this debt arises out of high electricity losses and inability of power companies to recover all the bills which leave power sector unable to discharge obligations towards fuel suppliers and banks.

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