Economist Atif Mian proposes solution for ongoing economic crisis

Renowned economist and former member of government's Economic Advisory council Atif Mian explains why Pakistan is still economically dependent.

Atif-Mian
Atif Mian explains the persistent economic crisis of Pakistan

 

Legendary Pakistani-American economist explained the country’s persistent economic crisis. He explored why Pakistan sought out its largest bailout package by critically analysing the performance during the last five years. Pakistan Tehreek-i-Insaf government appointed Atif Mian to Economic Advisory Council but later asked him to step down under pressure.

Main reasons of economic crisis – Mian Atif

 

  • Pakistani government focused on import-led growth.
  • External debt is making Pakistan more expensive and less competent globally.
  • Pakistan has suffered an extreme version of ‘Dutch disease’.
  • Objective assessment of CPEC is forbidden in the country.
  • Burrowing and spending deals are highly opaque.
  • Depreciation of currency jeopardizes the profitability given the insane exchange rate policy.
  • There’s no open bidding and Chinese companies decide everything.
  • Media portrays the CPEC as a game changer and didn’t explore the opposite side of the story.

 

On the eve of the country’s independence,  Atif Mian unfurled the economic overhaul in a series of tweets. He notified some big reasons for poor fiscal growth and policy initiatives and mentioned the solution as well. Pakistan is suffering from a Dutch disease in which growth in one sector destabilizes another one.

 


Also See: International Economists ‘Shocked’ Over Atif Mian Fiasco, Call It A Loss For Pakistan


For instance, If natural resources get developed than manufacturing sector lags behind, said  Atif Mian. Due to the huge investment in CPEC external debt rose from $62 to $90 billion. This burrowing raises external demand and makes Pakistan more vulnerable globally. Moreover, to make the matter worst finance minister stripped away the independence of the central bank and kept on the terrible policy of appreciated exchange rates.

To ask a question about CPEC is likely to conspire against the national interest of Pakistan and the ban of assessing CPEC creates further dismay.

Solutions proposed by Atif Mian – A way forward

The country must generate sufficient additional exports to keep track of revenue in the first place. The use of domestic transportation and local energy consumption will also help in reviving the ER policy. Deals have to be structured properly with a proper macro-product framework to enjoy the gains from CPEC.

Both the positive and negative aspects of CPEC must be discussed by media. Focus on infrastructure and institution building while working with another country by borrowing from outside. Furthermore, Invest in people and this would probably paybacks. Last but not the least step is to make sure that concessional rates of loan contracts must not contradict the real values.

What do you think of Atif Mian’s competence in the prevailing economic crisis? Please leave your comments below.

 

 

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept