On Pakistan's 73rd Independence Anniversary, the people of the South Asian nation have demonstrated their resilience yet again. They have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Large Scale Manufacturing (LSM) is recovering. Monthly cement sales have rebounded to the pre-pandemic level, fertilizers sales are setting records, fuel sales have increased, tax collection is up, exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Qamar Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties, Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.
Coronavirus Pandemic:
Foreign and domestic media, activists and think tanks lived up to their reputation when it comes to the coverage of coronavirus pandemic in Pakistan. They all made dire predictions of imminent collapse of the state and society. That has been the case in the past when Pakistan faced terrorist threats and natural disasters. As in the past, they all turned out to be wrong. Pakistan successfully tacked the pandemic and brought it under control. This success has drawn praise from the likes of Bill Gates known for his global health activism and philanthropy. Speaking on CNN Global Public Square, Gates said:
"Pakistan had a pretty bad peak in Karachi but those numbers have come down and now they look like Europe. India is still sadly in growth phase as is South America...in Africa South Africa is top...in the rest of Africa we've been funding a lot of testing because it's a bit opaque..what goes on in the lungs..you are more exposed to indoor and outdoor particulates even at younger ages you can get disease compared to let's say a rich country"
Civil-Military Relations:
Attacking Pakistani military and describing Pakistani civilian leadership as "puppets" has been one of the favorite hobby horses of foreign and domestic media, activists and think tanks. It seems that they would like nothing better perpetual conflict between the two power centers. So far, these critics have miserably failed in igniting the civil-military conflict in Pakistan.
Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling health and economic crises faced by Pakistan. This has been one of the keys to country's success in dealing with the twin crises.
Large Scale Manufacturing:
In spite of COVID19 pandemic, Large Scale Manufacturing (LSM) went up 16.81% in June 2020 from May 2020, but still down 7.74% from June, 2019. LSM declined 10.17% in fiscal 2020 from fiscal 2019.
Foreign and domestic media, activists and think tanks lived up to their reputation when it comes to the coverage of coronavirus pandemic in Pakistan. They all made dire predictions of imminent collapse of the state and society. That has been the case in the past when Pakistan faced terrorist threats and natural disasters. As in the past, they all turned out to be wrong. Pakistan successfully tacked the pandemic and brought it under control. This success has drawn praise from the likes of Bill Gates known for his global health activism and philanthropy. Speaking on CNN Global Public Square, Gates said:
"Pakistan had a pretty bad peak in Karachi but those numbers have come down and now they look like Europe. India is still sadly in growth phase as is South America...in Africa South Africa is top...in the rest of Africa we've been funding a lot of testing because it's a bit opaque..what goes on in the lungs..you are more exposed to indoor and outdoor particulates even at younger ages you can get disease compared to let's say a rich country"
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| CNN Screenshot of Pakistan's COVID19 Progress |
Civil-Military Relations:
Attacking Pakistani military and describing Pakistani civilian leadership as "puppets" has been one of the favorite hobby horses of foreign and domestic media, activists and think tanks. It seems that they would like nothing better perpetual conflict between the two power centers. So far, these critics have miserably failed in igniting the civil-military conflict in Pakistan.
Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling health and economic crises faced by Pakistan. This has been one of the keys to country's success in dealing with the twin crises.
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| Pakistan Stock Market Best Performing in Asia. Source: Bloomberg |
Large Scale Manufacturing:
In spite of COVID19 pandemic, Large Scale Manufacturing (LSM) went up 16.81% in June 2020 from May 2020, but still down 7.74% from June, 2019. LSM declined 10.17% in fiscal 2020 from fiscal 2019.
Pakistan Manufacturing Output. Source: Bloomberg
Cement Sales:
Cement is a basic building material. Its sales are seen as a very important economic indicator of development activity. The cement sales jumped 37.75% from 3.512 million tons in July 2019 to 4.838 million tons in July 2020, the first month the new fiscal year 2020-21.
Pakistan Cement Sales. Source: Bloomberg
According to the data released by Pakistan's cement industry group APCMA, the local uptake of cement in July 2020 increased by 32.67% to 3.953 million tons from 2.979 million tons in July 2019 while exports rose 66.14% to 0.885 million tons, up from 0.533 million tons in same month last year.
Fertilizer Sales:
Sales of urea, a barometer of agriculture activity, have surged 83% to 1.18 million tons in June 2020 from a year ago. The surge came after a decline 7% YoY to 2.6 million tonnes in the first half of CY20, partly due to COVID19 related lockdown in the country.
Export Performance:
As the COVID19 pandemic eased in Pakistan, the country's exports bounced up to $1.998 billion in July 2020 against $1.889 billion in the same month of the last fiscal year 2019, up 5.8% in dollar terms year-over-year. The imports stood at $3.54 billion in July 2020 against $3.696 billion in the same month of 2019, recording a decline of 4.2 percent. The overall trade balance reduced by negative 14.7% as it stood at $1.542 billion in July 2020 compared with $1.8 billion in same month of 2019.
Pakistan is trying to address various impediments to growing exports. “More than half of Pakistani exporters struggle with domestic and foreign regulatory barriers,” said Invisible Barriers to Trade – Pakistan 2020: Business Perspectives. The report was prepared in collaboration with the World Bank Group’s country office in Pakistan. There's significant upside to exports if Pakistani government and exporters can join hands to address these "invisible barriers to trade".
Naya Pakistan Housing:
Inn spite of the pandemic, Pakistani Prime Minister Imran Khan announced a new housing construction incentives package that includes down payment assistance and expansion of home loans portfolios by commercial banks at discounted rates for affordable housing for the poor.
Shariah compliant financing is also included in it. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. The average for South Asia 3.4%. New housing drives a large number of sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances. These incentives are designed to stimulate the economy, boost employment and deal with the growing shortage of affordable housing in the country.
CPEC Gains Momentum:
The work on China-Pakistan Economic Corridor (CPEC) has gained momentum in spite of the pandemic that has slowed many sectors of the country's economy.
Pakistan has begun construction on major dam projects worth $11 billion. Diamer Bhasha dam will store 6.4 million acre-feet (MAF) of water and generate 4,500 MW of electricity. Azad Pattan hydro-electric project will produce 700 MW of electricity.
Financing for the $6.8 billion ML-1 railway project has been agreed. It will be the first major upgrade of the train track since Pakistan's independence in 1947. This project will upgrade Pakistan’s existing 2,655km railway tracks to allow trains to move up to 165km/h – twice as fast as their current speed.
Nine special economic zones (SEZs), including Rashakai in Khyber-Pakhtunkhwa, Allama Iqbal in Punjab and Dhabeji in Sindh province, have been launched. Some 1,000 acres of land had been procured for Rashakai SEZ, the groundbreaking of Allama Iqbal SEZ in Faisalabad had been done and tenders opened for Dhabeji SEZ, which would be built on 3,000 acres of land.
Pakistan's Human Development:
One of the biggest areas of concern is Pakistan's laggard performance in human development. This requires closer civil-military cooperation to deliver better education and health care to improve the country's competitiveness in the world.
There's reason for optimism, however. Key indicators show that education and health care in Pakistan are improving but such improvements are slower than in other countries in South Asia region. Pakistan's human development ranking plunged to 150 in 2018, down from 149 in 2017. It is worse than Bangladesh at 136, India at 130 and Nepal at 149. The decade of democracy under Pakistan People's Party and Pakistan Muslim League (Nawaz) has produced the slowest annual human development growth rate in the last 30 years. The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018. One of the biggest challenges facing the PTI government led by Prime Minister Imran Khan is to significantly accelerate human development rates in Pakistan.
Summary:
Pakistanis have defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. Pakistan has successfully fought off the deadly COVID19 virus and begun to bounce back economically. Moody's rating agency has raised Pakistan's economic outlook from "under review for downgrade" to "stable". Pakistan's Planning Minister Asad Umar is talking of a "V-shaped recovery". Monthly cement sales have rebounded to pre-pandemic level, fuel sales have increased, tax collection is up, exports are rising and the Karachi stock market is booming again. Prime Minister Imran Khan and Army Chief General Javed Bajwa have been on the same page in tackling the health and economic crises faced by Pakistan. Contrary to the critics of Pakistan's civil-military ties, Khan-Bajwa cooperation has been one of the keys to the country's success in dealing with the twin crises.
Here's a brief video clip of Bill Gates' remarks on CNN:
https://youtu.be/NWTkfhiwsG4
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