Imran Khan’s vows on economy ‘rhetoric, not reality,’ say economists

Imran Khan. (AP)

• Economists say new PM needs a pragmatic approach to successfully revive the country’s ailing economy
• Khan calls on public to support government’s crackdown on corruption

KARACHI: Economists and business leaders have accused Pakistan’s new Prime Minister Imran Khan of failing to deliver a pragmatic policy to tackle the country’s mounting economic woes.
Commenting on Khan’s first address as prime minister on Sunday, Dr. Ikram-ul-Haq, a senior economist, said: “He only touched on some of the areas that are worrying. The PTI as party in waiting has failed to produce a concrete policy and plans to handle the economic challenges.”
Khan described the country’s economic problems as the most pressing in its history, and promised to transform its Federal Board of Revenue (FBR) and introduce incentives to attract foreign investment.
Pakistan’s current account deficit has surged by more than 40 percent in the past year to $18 billion by the end of the last fiscal year.
“In the history of Pakistan, economic conditions have never been as bad as today,” the prime minister said.
However, Haq told Arab News: “So far, there is only a desire to revive the economy, but an actual agenda backed by pragmatic analysis and research is missing.
“From rhetoric to reality will be the challenge in the coming days.
“The monstrous debt, and huge fiscal and current account deficits are symptoms of an ailing economy,” Haq said.
Mohammed Sohail, CEO of Topline Securities, said: “Considering the external accounts problems, it would be challenging for a new economic team to put the PTI’s economic agenda to work.”
Khan has said that reforming the FBR, Pakistan’s tax collection authority, is his top priority, but has failed to offer details or an action plan.
“The FBR desperately needs reforms from top to bottom. Corruption is rampant and nobody is there to question,” Dr. Ashfaque Hassan, senior economist and former adviser to Ministry of Finance, told Arab News.
“The government will have to bring in someone from outside the FBR as chairman to achieve the reforms it mentioned.” 
Low export levels are a major reason for the growing trade deficit, with the prime minister announcing plans for a committee to address the deficiency.
“A committee was also formed by former prime minister Shahid Khaqan Abbasi. The current economic team is good and they need to increase exports by any means,” Ghazanfar Bilour, president of the Federation of Pakistan Chamber of Commerce and Industry, said.
“We have been constantly calling for return of our export refunds, which exporters desperately need, and relief to our export-based industry. Our input cost is too high and renders us uncompetitive on the international market.” 
Khan also said the government will encourage small businesses to ensure an economic uplift. The move was hailed by small traders and manufacturers, who called for concrete steps to be taken.
“The cottage industry is Pakistan is on the verge of collapse due to lack of cheap inputs such as electricity and other raw material,” Mahmood Hamid, president of the All Pakistan Organization of Small Traders and Cottage Industries, said. 
“If translated into reality, the PM’s plans will alleviate poverty from the country since this sector is one of the biggest jobs providers,” he said.
Khan is also leading an austerity drive to cut down expenditure. 
“Pakistan’s prime minister has 524 workers and 80 cars, of which 33 are bullet proof. The price of each car is more than 50 million Pakistan rupees ($500,000),” he said, promising to cut the number of employees and government vehicles.
Khan called for public support in his government’s fight against corruption. “You should stand by me. Either the country will survive or the corrupt people will,” he said.