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Reversing the economic decline of Pakistan

As Pakistan heads towards a change of government, Dr Kamal Munir predicts tough challenges ahead for the new rulers.

As the country gears up for a general election an advisor to the Pakistan government warns of the tough challenges ahead for any new government.

Dr Kamal Munir of Cambridge Judge Business School says there are no shortcuts and it will be difficult for a single government to turn the country’s fortunes round completely.

A member of a team of economists advising Pakistan on its industrial policy, he feels the emphasis should be to ‘set the country on the right path’.

“They really have a tough challenge on their hands because whether you talk politically, economically or socially, the country is heading for rock bottom, if it has not hit rock bottom already. Politically everyone knows that there is a serious problem with the war on terror, the Taliban insurgency and drone strikes in the north west of Pakistan. Something needs to be done, this is completely unsustainable and it costs the country a great deal.”

Dr Munir lists a number of economic challenges facing a new government, the first is energy provision. It is costly, riddled with power cuts and governed by a policy that was introduced 1994.

“In my view that has got to be reversed because that has proven to be completely disastrous. After 18 years we neither have enough power nor power that is affordable for the majority of the people.”

He adds that when a new government is elected it will face hard decisions starting with the production of cheap electricity so that Pakistan can return to manufacturing and stimulate industry.

That will be followed by the need to solve the problem of unemployment. He says about two thirds of the population is under 30 and unless the youth unemployment issue is addressed, there will be a ’social catastrophe’.

He suggests one way forward is through ignoring mechanised and capital intensive production in favour of labour intensive ways.

“It may not be the most efficient thing to do but socially it may be more desirable.”