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Next government needs to address economic, energy issues: PBC

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Pakistan Business Council (PBC) expects a number of political parties forming a coalition government following the May 11 polls to address the country’s key socio-economic, energy issues. Chief Executive Officer (CEO) Kamran Y Mirza feels none of the political parties in the election are able to attain majority.

“It is generally believed that elections will be held in a fair manner compared to the previous elections. Though it appears that no single party will have majority, however the level of violence and targeting of some political parties is very disturbing feature of this election,” Mirza told Business Recorder on Thursday. He said the upcoming polls could be a “watershed” event to set ways for the newcomers to serve the country in future.

“Most probably, a coalition government will have to be formed, but that by itself should not be taken as a negative as coalition governments are functioning effectively in many countries,” Mirza added. He said that local and foreign investors are upbeat about these polls – the first being held after the 18th Amendment and the setting up of more empowered Election Commission installing a neutral caretaker government is also laudable.

The election process also gives a strong impression that the size of the electorate has been increased after the registration of a large number of voters, especially youth. Further, for the first time unprecedented use of media has been witnessed for maximum reach out to the electorate, he added. “We expect that the newly-elected government will address and focus on the major socio-economic issues and energy crisis on top priority. This may require the government to take some difficult but essential decisions, which in the short term, will prove unpopular and may cause hardships,” Mirza added.

He said that it is an encouraging sign that the issues being debated in the public and media do represent the major challenges in the socio-economic arena. “It is also a positive indication that the party manifestos have identified and addressed the socio-economic issues in greater detail compared to previous elections. Therefore, to some extent political, at least on paper, consensus has been developed on the socio-economic issues and solutions or action plans to address these issues are quite similar,” he said.

He said that PBC has analysed the political manifestos of the major parties and has compared them with its National Economic Agenda (NEA). Without naming the parties, he said that some manifestos have addressed the socio-economic issues identified in NEA in greater detail than the others.

Replying to a question regarding suggestions for next government for long term economic growth, Mirza said that management of the economy will determine the success of the next government. “The upcoming government will have to take some difficult decisions to reduce fiscal deficit and at the same time it will need to improve tax collection as well as increase the tax base,” the PBC CEO said.

In addition, the government will also need to support the Public Sector Enterprises and focus on drastic reduction in the circular debt via better governance structures, he added. As the forex reserves are at record lows and there is possibility that Pakistan is going back to the IMF, the new government ensures to fulfil commitments that it makes at the time the support is provided by the Fund, he said.

He also urged the upcoming government for direct subsidies to the weak sections of the population like social protection, health or education. Talking about the political uncertainty, Mirza said all over the world, political uncertainty directly hit the economic progress. “Political uncertainty slows economic activity and prevents the private sector from taking long-term investment decisions,” he said.

It is unfortunate that in the recent past, the government has followed erratic and inconsistent policies which have dented the confidence of the private sector, he said. The new government should honour its contracts and commitments to restore the confidence of investors/private sector, he demanded. Mirza hoped that a government is sworn in very shortly after the election results are announced as there are no major ideological differences between the major parties on the socio-economic challenges being faced by Pakistan.

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