1. Critically analyze the report and highlight two to three aspects where it seems
misleading or exaggerating the true reality.
I.
II.
III.
IV.
The dollar rate was not taken into account while creating the data. The numbers have not
been adjusted with respect to the dollar rate or the present value of money.
The GDP or growth in income does not reflect the true reality as fewer people have gotten
rich but massive population almost 50% is below the poverty line.
The massive growth in population has not been taken into account. The exports with respect
to increase in population are far less.
The massive growth in debt has not been taken into account, Pakistan took more than 90% of
it’s current outstanding debt in the 21st century, however, the report hasn’t shed light on this
aspect.
2. The report presents the Economic performance of Pakistan by highlighting various
economic and social indicators but it has missed an important indicator related to the
quality. What is it? Explain in details.
The report has not shed light on the present value of Pakistani rupee in every year with respect to
dollars. No doubt, the exports have increased, GDP has increased, the per capita income has
increased but the value of Pakistani rupee in let’s say is different from what it is in 2021. The
rupee was stronger with respect to dollar in the 1970 then it is in 2021, which means lesser rupees
in 1970 are worth more than more rupees in 2021 because the dollar rate is 8 times more in 2021
than it is in 1970. Hence, the qualitative value of the earnings or the growth is lesser in 2021 than
in 1970.
3. The cost of production on average in Pakistan is higher than its peers for the very
same manufacturing output. What do you think is the root cause of it?
The root cause is the over reliance on Importing raw material for production. Pakistan imports
maximum things to produce a good locally. In many sectors, let’s say in the automobile sector,
everything is Imported and the final product is assembled in Pakistan. This puts a massive pressure on
the import bill as the dollars from remittances and exports are not good enough to meet this Import
bill and hence the currency devalues and the result is Inflation. Now, as a result of Inflation,
everything gets expensive, especially the most major thing required for production, Power or
Electricity. Therefore, the one unit of output produced by manufacturers gets expensive as compared
to India, China, or Bangladesh. The manufacturers are not able to achieve the economies of scale due
to the same reason because extra one unit production is not feasible for them as compared to their
competitors. Poor planning on government’s end has also been a factor. Lack of thought has ever
been put in making economic decisions. Too many subsidies, low taxation, no future planning for
cheaper power generation and somewhat lack of skilled labor has resulted in higher costs of
production by the Pakistani manufacturers.
4. The report in at the end presents roadmap for ensuring sustained & inclusive
economic growth. Which of those measures do you think would be instrumental in
saying good bye to IMF.
Human Resource Development – In my opinion, Human resource development is Instrumental in
saying goodbye to the IMF. Taking the example of Mr. Manmohan Singh, when he was the finance
minister of India, in the Narsima Rao government, he had a vision of increasing India’s foreign
reserves by increasing the Information technology exports, which now sit at 313 billion dollars
yearly. He created state of an art IIT university which has produced global IT leaders. He envisioned
to make Bangalore, India’s wall street and now all major IT business of the world have an office in
Bangalore. He made programming mandatory to be taught from a very young age, his government
mandated schools to start teaching programming to kids from 6th grade onwards. 25 years down the
road, an Indian is now the CEO of all major IT business. With such a vision and investment in
Human resource, India is now able to generate 47 % of its exports from IT, which are both feasible
and sustainable. Similarly, the number of skilled workers in UAE are more Indians than any of the
other South Asian countries. They even have separate Dubai Airport lounges and exits for Indian
nationals. The simple reason for this prestige is that the Indian government invested in its people,
taught them skills. The skills let you grow as a person and as a country. The more skilled Pakistanis
be, the more will be the exports and the sooner we will be able to bade good bye to the IMF.