FeaturedNationalVOLUME 15 ISSUE # 06

Hopes still alive

Many people still have high hopes of the government of Prime Minister Imran Khan for improvement in the economy and their lives despite facing a tough year. According to an international survey, educated youths expect an economic revival in six months, which puts extra pressure on the government to improve governance.
Young people are still hopeful about the job situation in Pakistan despite the fact that thousands of people have lost their sources of income in the wake of shrinking profit margins in businesses. Less educated people, including illiterates, have less confidence in the economy than the educated lot with post-graduates showing the highest confidence, resulting in a score of 41.6, according to an opinion poll, conducted by Ipsos, a global market research and consulting firm. The confidence level was almost similar among urban and rural respondents.
The survey says people’s confidence in the economy has declined as compared to India and global trends but respondents still have hope for improvement in the situation in the next six months. The findings reveal that consumers have a very low confidence and are reluctant to make investment decisions but remained hopeful the situation would improve and did not see risks to their jobs. People were questioned about their confidence in the economy, their opinion about the current situation compared to a year earlier, investment decisions and job prospects. The results are based on a score ranging from 0-100 and the index inching towards 100 means better sentiment. The survey was conducted in August.
Pakistan’s score on the National Index stood at only 33.8 compared with India’s score of 62.9 and global average of 50.2. Young people between the ages of 18 and 30 years showed more positive sentiment about the economy when compared with middle-aged and older people. Similarly, the less educated people, including illiterates, exhibited less confidence in the economy than the educated lot with post-graduates showing the highest confidence, resulting in a score of 41.6, according to the opinion poll. Owing to the government’s economic stabilisation policies, the country is passing through a phase of low economic growth and higher inflation. A recent report by the Asian Development Bank showed that Pakistan would grow at a pace of only 2.8% while inflation was projected at 12% – the highest in South Asia.
The survey findings are in line with the prevailing sentiment about Pakistan’s economy where the lowest income groups are affected the most and political and economic uncertainties have shattered their confidence. The National Confidence Index was the lowest in Sindh while it was the highest in Balochistan and Khyber Pakhtunkhwa. The National Confidence Index is the lowest in Pakistan among 28 nations surveyed. China enjoyed the highest National Index with a score of 73.7, Saudi Arabia 64.7, India 62.9 and Turkey 38.6.
The score on the Current Index, which showed a comparison between the current economic situation and a year ago, was the lowest at 19.5 in Pakistan. It means people’s confidence in the economy was better a year ago. Even the most educated class of the country believe that the situation in August 2019 was worse than a year ago. On the Expectations Index, the score was 43.7, suggesting that people still have hope for improvement in the situation in the next six months. But the score was still lower than the global average of 57.6 and India’s score of 69.5.
The respondents are still hopeful about the job situation in Pakistan. They answered questions such as whether anybody known to them had lost job in the past one year or were there chances to lose job in the next six months. The score on the Jobs Index was 52.2, which was close to the global average of 58 but lower than India’s score of 60.4. Prime Minister Imran Khan has promised to create 10 million jobs in five years and build five million houses. But the government’s economic stabilisation policies have made it difficult to achieve the goals, the report observed.
According to a report in Forbes, Pakistan is pushing its IT sector to U.S. companies and investors, hoping international deals will translate to a bottom-line boost for the country’s struggling economy. Pakistan’s IT sector has performed the best if its overall economic performance is reviewed. It is because the country’s charismatic new prime minister, former international cricket star Imran Khan, has made the economy his top priority. As part of a broader set of initiatives, the country is trying to grow its already substantial tech sector and attract international investment, especially from the United States and neighboring China, which already has built a vast deep-sea harbor and naval port in Gwadar, on the Arabian Sea, as part of the China-Pakistan Economic Corridor.
According to the magazine, Pakistan already generates at least $4 billion a year in IT exports, though the number is likely higher because some IT-related payments get lumped in with international remittances. The biggest areas of operation are software development, Business Processing Offices and call centers. Now, the country hopes to move into more high-end sectors such as AI, gaming and visual effects. One potential opportunity is moving into RISC-V microchip fabrication and export.
As of 2017, Pakistan had 207 million residents, making it the world’s sixth-most populous country, roughly the size of the equally fast-growing Indonesia and Brazil. Pakistan also has one of the world’s youngest populations; in 2007, the last year such official data was available for the country, 75 percent of the country was under the age of 35, according to the United Nations. The number now is closer to 64 percent, still a prodigious tilt toward a younger, more tech-savvy population. Pakistan is one of the world’s largest English-speaking countries (English is one of two official languages), behind India, the United States, and Nigeria. Its English-language population is much larger than the United Kingdom, the Philippines, Germany, and smaller former British colonies. The country has 161 million cellphone users, 70 million of them on more modern 3G and 4G networks, and 72 million broadband users. The country turns out 35,000 graduates of IT-related training programs every year. It has no restrictions on foreign ownership or repatriation of capital. The Pakistani government just issued an e-commerce policy that includes plans to create 15 IT parks around the country to house up to 5,000 companies. Issues with crime, corruption and security appear to have improved significantly compared to 10 years ago, according to international indexes, particularly in major cities such as Karachi, the magazine noted.
The people of Pakistan hope of better days in six months. The government believes the country has come out of the woods. However, the International Monetary Fund (IMF) and other international organizations think the stabilisation phase would end in two or three years. People of Pakistan cannot wait for that long. The government will have to start providing relief to them in few months instead of waiting for three years. It will have to improve governance and check prices immediately, as the people have already run out of patience.