Faced with several challenges in economic recovery, the federal government of Pakistan has launched a plan called ‘Udan Pakistan’, which has set lofty goals for economic growth and exports, as well as social sectors.
Pakistani Prime Minister Shahbaz Sharif formally inaugurated the program on December 30, at a time when the government has made claims about stabilizing the country’s economy and reducing the pace of inflation. Meanwhile, Pakistan is trying to reform sectors including taxation, privatization and energy in connection with a $7 billion bailout package from the IMF.
Under ‘Udan Pakistan’, economic goals have been set for the next five and longer term up to 2035. For example, a target of six percent increase in the country’s growth rate in the next five years has been set, and a target of taking the size of the gross domestic product (GDP) to one trillion dollars in the next 10 years, i.e. by 2035, has been set.
It should be remembered that Pakistan’s GDP is currently around $374 billion.
Meanwhile, observers say the ambitious targets set for the next five years under ‘Udan Pakistan’ are ‘ambitious’ compared to the country’s current economic indicators.
Economic experts say that obtaining them is difficult because, first, there is currently no solution in sight to the ongoing political crisis in Pakistan, and second, it may be difficult to attract investors due to the increasing incidents of terrorism in the country.
What is the ‘Udan Pakistan’ program?
When Federal Minister for Planning and Development Ahsan Iqbal was contacted about the ‘Uran Pakistan’ program, his media team provided written responses to BBC Urdu’s questions.
Regarding this program, the Planning Minister says that Udan Pakistan is a comprehensive national economic transformation plan designed to take Pakistan to ‘new heights of development’.
According to the government, the goal of this program is to make the country stable, sustainable, and competitive in the global economy, based on a framework of the Five Es.
The statement said, “The first objective is to create an export-oriented economy, the second is to bring about a digital revolution in the country, the third is to deal with climate change and its impacts. The fourth sector where attention will be paid is energy and infrastructure, while the fifth is to build an equity-based society.”
Big goals for five sectors and claims to be ‘game changers’
The first of the goals set by the government under this program is to increase exports to $60 billion annually in the next five years.
It should be noted that the current volume of Pakistan’s exports is around $30 billion annually. Similarly, the GDP growth rate should be taken to six percent in the next five years. The growth rate in the first quarter of the current fiscal year has been less than one percent.
In the e-Pakistan sector, a target has been set to take the information technology freelancing industry to five billion dollars in the next five years, for which two hundred thousand IT graduates will be prepared annually.
In the area of climate change, a target of reducing greenhouse gases by 50% in the next five years has been set, along with an increase in arable land by more than 20% and an increase in water storage capacity by up to ten million acre feet. In the energy sector, the share of renewable energy is to be increased to ten percent.
According to the ‘Uran Pakistan’ document in the field of social equality, the poverty rate is to be reduced by 13 percent.
According to World Bank data, 40 percent of the population in Pakistan lives below the poverty line, and according to World Bank estimates, this rate is likely to remain above 40 percent by 2026.
A written response from the Minister of Planning stated that the government will provide investment opportunities in this program, which includes simplified rules and incentives to promote national and international investment.
Along with this, support will be provided for IT startups and the freelancing industry in terms of digital facilitation, while government support in the form of funds and grants will be provided for technological research, innovation, and industrial development.
Large-scale development projects through public-private partnerships are also part of this program.
The government has declared Udan Pakistan a ‘game changer’. In this regard, the Federal Minister for Planning said that the program aims to achieve economic stability as establishing an export-oriented economy will stabilize the Pakistani rupee and promote economic growth.
According to him, similarly, the promotion of modern technology under e-Pakistan will make Pakistan prominent in the global market and in the field of environmental protection, there will be better use of natural resources for sustainable development, while in the field of social equality, women and youth will be included in economic development.
Udan Pakistan’s targets ‘unrealistic’?
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The targets set in Udan Pakistan are much higher than the current indicators of Pakistan’s economy, and economists are not very optimistic about achieving them in five years.
According to him, achieving these goals seems very difficult given Pakistan’s current ground realities, such as political instability and poor law and order situation.
“Nobody will take these targets seriously,” former Pakistani Finance Minister Dr. Hafeez Pasha told the BBC. He said the biggest problem facing Pakistan’s economy at the moment is short-term targets while the government is setting long-term targets.
He said that the government is not able to achieve the short-term goals set under the IMF program, such as tax collection, etc., so in such a situation, how is it possible for the country to move towards any major goal?
Dr. Pasha said that achieving a six percent growth rate is very difficult and taking the GDP size to one trillion dollars ‘seems very difficult’ because the Pakistani economy has barely managed to achieve a growth rate of one percent in this fiscal year.
According to him, achieving the $60 billion export target will be difficult because this target “has to be achieved by the industry, which will be achieved through investment in it, while the state of investment in the industry in Pakistan is that it is currently at its lowest level in 25 years.”
Dr. Pasha said that investment in Pakistan has already decreased due to political instability and everyone is aware of the frequent incidents of terrorism.
He said the government’s plan for the next five or ten years “seems inappropriate at this time, when achieving short-term goals seems impossible.”
Political economy expert Abbas Mousavi, speaking on this, said that political stability and law and order play a key role in economic growth.
He said that for the success of major projects, it is important for the government to have credibility among the public.
He gives the example that ‘the government has talked about a digital revolution in Udan Pakistan, while the situation here is that the freelancing community has been badly affected due to the internet shutdown.’
In Abbas Moosavi’s opinion, the inclusion of all in Udan Pakistan will be considered a claim only because political representation in the country is ‘compromised.’
Meanwhile, senior economic affairs journalist Shahbaz Rana said, referring to the development goals in the digital sector, that the alleged installation of firewalls worth billions of dollars has affected the development in the IT sector.
On the other hand, the Federal Minister of Planning says that this economic recovery program has been prepared ‘in light of ground realities and global experiences’.
According to him, these goals are achievable if the government and the private sector work with transparency, perseverance, and public participation, and he cited examples of countries such as Malaysia, Turkey, and South Korea.
Although Ahsan Iqbal admits that these goals are certainly ‘challenging’, according to him they are not unrealistic.
‘These goals can be achieved through effective policymaking by the government, development partnerships, and better resource allocation.’
Won’t Pakistan have to go to the IMF after this program?
Addressing the launching ceremony of the Udan Pakistan program, Federal Finance Minister Muhammad Aurangzeb said that after two to three years of this program, Pakistan will not need to go to the IMF.
Commenting on the Finance Minister’s statement, former Finance Minister Dr. Hafeez Pasha said, “Our governments have said 25 times in the past that this program is the last, but the fact is that Pakistan has become the country in the world to receive the IMF program the most times, 25 times.”
He said that the government should work towards achieving the short-term goals set by the IMF, which are currently not being achieved.
“Everyone will just laugh at setting big goals in the name of Uran Pakistan.”
