Challenges and prospects – Daily Times

In the fiscal year 2024-25, the Pakistani government faces the daunting task of addressing the multiple socio-economic challenges that have had a significant impact on the lives of its citizens. Faced with pervasive issues such as high inflation, rising prices, stagnant incomes, rising taxes and exorbitant utility costs, the average Pakistani struggles to make ends meet every day.

These economic difficulties are exacerbated by the deteriorating law and order situation, necessitating a fresh military operation, Azm-e-Istihkam, against criminal elements. This confluence of economic and security challenges requires urgent and effective policy interventions by the state to alleviate citizens’ suffering and restore stability.

Government fiscal policy, including budget allocations and monetary interventions, plays a key role in managing inflationary pressures. Effective management of fiscal deficits, prudent monetary policy and targeted subsidies to vulnerable groups are key measures to contain inflation and reduce the burden on society.

Other South Asian countries, such as India, have implemented digital transformation initiatives to improve financial inclusion and access to services, while Bangladesh has focused on export-oriented industrialization and social development. The country’s ready-made garment sector has contributed significantly to GDP growth and employment, while Bhutan has prioritized social welfare programs to reduce poverty and improve health and education outcomes. Bhutan’s commitment to gross national happiness (GNH) and environmental protection has made it a regional leader in renewable energy production.

Bhutan’s commitment to Gross National Happiness (GNH) and environmental protection has made it a regional leader in renewable energy production.

Sri Lanka has focused on infrastructure development and regional connectivity as key drivers of economic growth, with the Colombo Port City project aimed at creating a financial hub and attracting foreign investment. Social welfare programmes have been implemented to support vulnerable populations and improve access to health and education. These examples illustrate the diverse approaches to addressing common socio-economic challenges in South Asia, promoting inclusive growth, improving living standards and increasing resilience in the face of global economic uncertainty.

A major factor in the economic burden on Pakistani households is the rapid rise in the prices of goods and services. Price increases in various sectors have outpaced income growth, making it difficult for families to afford basic necessities. Addressing price stability requires comprehensive strategies that include increasing agricultural productivity, reducing import dependence, and promoting competition in markets to mitigate monopolistic practices that drive up prices.

The issue of low income is closely linked to Pakistan’s economic structure, which is dominated by informal employment and underemployment. Many Pakistanis work in the informal sector, lacking job security, social protection and adequate wages. Formalizing the informal economy through policy incentives, promoting entrepreneurship and investing in skills development can create decent work opportunities and improve the income levels of marginalized sections of society.

High utility costs, including electricity, gas, and water, pose another major challenge for Pakistani households. Inefficient governance, inadequate infrastructure, and mismanagement of subsidies contribute to rising utility bills that strain family budgets. Investing in renewable energy sources, improving transmission and distribution networks, and streamlining subsidy mechanisms can help stabilize utility costs while ensuring sustainable access to energy for all. Tax policies are regressive and place a permanent burden on middle- and lower-income groups.

Reforming the tax system to make it more progressive, broadening the tax base and reducing tax avoidance are key steps to ensure a fair distribution of the fiscal burden. Additionally, simplifying tax procedures and reducing bureaucratic hurdles can increase compliance and promote a culture of tax honesty among citizens. The deteriorating law and order situation in Pakistan, exacerbated by criminal activities and terrorism, has necessitated stringent security measures, including military operations against culprits. While security operations are crucial to maintaining public safety, lasting peace and stability require a holistic approach. Strengthening law enforcement, increasing intelligence capabilities and promoting community engagement are essential elements of a comprehensive security strategy.

In addition to economic and security challenges, Pakistan faces pressing social issues such as education, health care, and environmental degradation. Access to quality education remains limited, especially in rural areas, perpetuating socio-economic disparities and hampering human capital development. Investment in educational infrastructure, teacher training, and curriculum reform can improve educational outcomes and empower future generations.

Healthcare services in Pakistan suffer from inadequate funding, infrastructure gaps, and unequal access, leaving millions without basic healthcare. Expanding healthcare coverage, modernizing facilities, and investing in preventive healthcare initiatives can improve healthcare delivery and reduce the financial burden on households struggling with illness and disease.

Environmental degradation poses another existential threat to Pakistan’s future, with issues such as water scarcity, air pollution and climate change impacting public health, agriculture and livelihoods. Adopting sustainable development practices, protecting natural resources and implementing climate change adaptation strategies are necessary to protect the environment and ensure resilience to environmental threats.

Moreover, corruption remains a pervasive problem that undermines governance effectiveness, undermines public trust and diverts resources from essential public services. Strengthening anti-corruption measures, promoting transparency and supporting accountability in government institutions are key steps in fighting corruption and improving the delivery of public services.

Amid these complex challenges, the Government of Pakistan must adopt a coherent and inclusive policy framework that prioritizes the well-being of citizens, promotes economic stability, strengthens security and supports human development. Collaboration involving government agencies, civil society organizations, private sector stakeholders and international partners is essential to implement sustainable solutions and achieve inclusive growth. Pakistan must confront its socio-economic challenges and chart a course towards prosperity and resilience in fiscal year 2024-2025.

Prioritizing economic reforms, strengthening security, improving social services and encouraging good governance would help Pakistan reduce the suffering of its citizens, accelerate sustainable development and realize its potential as a dynamic and resilient country on the international stage.

The author is a Ph.D. in Political Science and a visiting lecturer at QAU Islamabad. His area of ​​expertise is political development and social change. He can be contacted at zafarkhansafdar@yahoo.com and tweet@zafarkhansafdar