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Bridging The Gap
Post Election Political Stability Brings Economic Growth Momentum for Pakistan – Economist Shan Saeed observes
  Tuesday 09 October, 2018
Post Election Political Stability Brings Economic Growth Momentum for Pakistan – Economist Shan Saeed observes

The Pakistan Business Council, a non-profit trade organisation based in Dubai, organized a talk on ‘Pakistan Economic Outlook - Aspiration with Investment’. Renowned economist Shan Saeed led the show and presented to an auspices gathering of over 200 business elite, diplomats, entrepreneurs, bankers and high net worth individuals who have strategic business focus on Pakistan.

Shan Saeed gave his insight that ‘economic confidence’ is the key to driving macro stability for Pakistan. He stressed that political stability after the General Election on July 25 2018 has brought about new hope and growth momentum for the economy. As Pakistan embarks upon the journey of economic transformation, global investors are keen to invest in the country due to her geo-strategic position and being an important player in the Belt and Road Initiative which includes an improvement in infrastructure.
The renowned University of Chicago trained economist shared that if Pakistan wants to change her economic destiny, upgrading the skill-set of human capital is vital for economic, financial and social empowerment for economic progression. During the World Bank / IMF annual meeting last October which Shan attended, he said 7 countries are important for Belt and Road equation;. Malaysia, Pakistan, Turkey, Kazakhstan, Djibouti, Indonesia and Egypt.

“UAE and Saudi Arabia would be partnering in the future economic development. The macro picture provides an inclusive partnership for all players to benefit in the long run. Moreover, Shan shared that the Belt and Road Initiative was the only winning infrastructure investment strategy that can spur growth globally. For the present government, economic confidence was the key to turn around the situation.”

Shan noted that the ballooning current account and trade imbalance were cause for concern for many investors. The budget revision done by Asad Umar was in the right direction for the following sectors in terms of tax to GDP ratio – cement, steel textile and automobile. This put the tobacco industry on the backfoot due to a higher excise duty. Investment outlook looked buoyant due to Agriculture, Energy, Technology, Construction, Water, Education.

Shan shared that government would be focusing on security, infrastructure, peace and stability, macro structure stability, energy and improving the country’s governance in the next 12-18 months. In order to turn the economy around, monetary policy will be used to steer economic growth in a positive direction. Austerity and boosting tax to GDP structure would provide impetus to a healthy balance sheet of the government and road ahead for Pakistan looked fairly bumpy. However, global investors remained buoyant on Pakistan’s economic growth. Shan touched upon the contentious issue trade escapade between China and USA as well as the growing concern among few economies.

He mentioned that trade war has never helped in enhancing trade activities but in fact it has brought retardation in trade volumes. Trade war between US and China has sent negative signals to the global financial markets. It carries a major risk of dampening investment, reducing spending, unsettling the alchemy of financial markets and bringing huge collateral damage. The ASEAN region is benefiting from trade tension and companies are making inroads. Countries like Malaysia, Vietnam, Thailand, Philippines and Indonesia are offering alternatives to the giant economies to trade and leverage from economies of scale.

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