To enhance economic self-sufficiency and reduce dependency on imported goods, it is imperative for policymakers in Pakistan to prioritise the incentivisation and development of local industries, said Majid Shabbir, general secretary of Islamabad Chamber of Commerce and Industry. Talking to WealthPK, he said, “For decades, Pakistan's economy has struggled with low productivity and suffered from a lack of competitiveness and inefficiency. Every sector, including agriculture, manufacturing, trade and other services, is being impacted by this problem, which also has an impact on overall output.” He stated that Pakistan currently manufactured a limited array of products, and exported even fewer items.

“In order for Pakistan to make economic progress, it needs to diversify its exports and enter new global value chains.” He underscored the significance of prioritising higher value-added manufacturing. “Industries like automobiles, electronics, machine tools, and food processing offer a unique opportunity for Pakistan to position itself as a key player in the global market. By focusing on these sectors, we not only diversify our manufacturing base but also elevate our products to a level of international competitiveness.” Shabbir said, “To do so, the government has to play a proactive role by improving the regulatory regime, the tax and tariff structures, and address the ease and cost of doing business.”

He further said that it was encouraging that in FY24, the government was gearing towards achieving higher growth of 3.5% through various measures like the Kissan package, industrial support, export promotion, encouragement of the IT sector, and resource mobilisation, etc. However, he suggested that achieving higher and sustainable economic growth would require prudent and effective economic decisions, political and economic certainty, and the continuation of friendly economic policies along with enough foreign exchange financing. “The ongoing short-term IMF loan facility and other bilateral and multilateral inflows will pave the way for further improving the macroeconomic environment and the confidence of economic agents,” he pointed out. Dr Ghualm Samad, an expert in international trade and commerce, told WealthPK that in the pursuit of economic growth and sustainability, nations often grappled with the challenges of balancing domestic production and global trade.

“Currently, Pakistan confronts unprecedented challenges in fiscal consolidation.” “An overdependence on imports has exposed the country to external shocks and vulnerabilities,” he said, adding that a robust local manufacturing sector could substantially reduce the need to import goods that could be produced domestically. “This will not only narrow the trade deficit but also enhance the resilience of the economy against external shocks. Samad argued that the focus must shift towards empowering the small and medium enterprises sector. “These enterprises, considered the backbone of any economy, play a crucial role in generating employment, fostering innovation, and contributing to economic diversity.” He said infrastructure development, policy consistency and regulatory frameworks were identified as critical areas that required attention.

Credit: Independent News Pakistan (INP)