An economic recovery authority was created

Interim Prime Minister Anwaarul Haq Kakar approved the establishment of a cabinet committee on economic recovery, giving it the mandate to propose measures for long-term economic growth and offer stimulus packages to the private sector.

The prime minister gave his approval to brief the 11-member committee to find solutions to Pakistan's economic problems by adding three more members to the list proposed by the finance ministry to the House of Prime Ministers, according to sources.

A notable addition from the Prime Minister's Office to the Cabinet Committee was the Prime Minister's Finance Advisor, Dr. Waqar

Masood Khan. Sources said the finance ministry had not recommended Khan's name, raising eyebrows. They pointed out that there was concern over the appointment of Khan as the Prime Minister's adviser on finance.

For that reason, he did not start sitting in Q-Block - the seat of the Ministry of Finance, they added. Finance Minister Dr Shamshad Akhtar will chair a cabinet committee set up to "draft an economic recovery plan within two weeks".

Pakistan is under the IMF's short-term program and has already committed to a strict fiscal and monetary framework. The government also agreed not to provide any further subsidies and to adopt a market exchange rate regime.

This leaves very little scope for proposing changes to the agreed framework, especially for the interim cabinet, whose constitutional life will end on November 9. The Pakistan People's Party (PPP) on Friday reacted to the interim prime minister's decision to set up cabinet committees, particularly a committee to pass laws and examine whether parliament has the mandate to make a specific law.

Pakistan is going through the worst economic times as the loss of economic productivity, elite capture and consumption-driven politics have pushed the economy to a point where it may take years to recover from a deep crisis.

Inflation is skyrocketing. Successive governments have passed on the cost of inefficiency to electricity consumers and are forcing people to start burning their electricity bills. The rupee's depreciation against the US dollar adds fuel to the fire.

According to the approved Terms of Reference (ToRs), the Cabinet Committee on Economic Recovery will assess the baseline macroeconomic situation as well as the challenges and recommend measures to address the issues.

There are many studies and plans to solve the chronic problems facing the economy, but the real problem is their implementation. The committee was tasked with reviewing and proposing measures to ensure fiscal discipline.

Pakistan posted a record federal budget deficit of Rs 6.7 trillion in the last fiscal year on the back of unsustainable interest payments of Rs 5.83 trillion. The federal government's net income was Rs 1.6 trillion less than its borrowing costs, a dire situation when authorities pay interest on borrowings by taking on new loans.

The cabinet committee will propose measures to revive the economic and private sector with a focus on short-term actions. It will explore the extent of stimulating private investment through streamlining and rationalizing the incentive framework.

Industries such as textiles and the automotive industry seek government subsidies and sponsorship. In February of this year, the government canceled electricity subsidies under the IMF program. The commission will also determine the extent of competitiveness and competition and create a business-friendly environment.

The competitiveness of Pakistan's private sector has been eroded by high taxes, unpredictable economic policies and high costs of doing business coupled with elite capture of the economy. Minister for Commerce, Industry and Production Ejaz Gohar, Minister for Planning Sami Saeed, Minister for Communications, Maritime Affairs and Railways Shahid Ashraf Tarar, Minister for Petroleum and Energy Mohammad Ali, Minister for Law and Justice Ahmad Irfan Aslam, Minister for Information Technology and Telecommunications Umar Saif and Vice President planning committee Dr. Jehanzeb Khan will be members of the committee.

The other three members are the prime minister's advisor for finance, Dr. Waqar Masood Khan, Adviser to the Prime Minister on Establishment Ahad Cheema and Special Assistant to the Prime Minister on Naval Affairs Vice Admiral (retd) Iftikhar Ahmad Rao. The committee will find ways to "facilitate export growth, diversification and value addition". Removing obstacles will accelerate the inflow of foreign investment.

The civil-military leadership has also established a Special Investment Facilitation Board to bring in foreign direct investment. It remains to be seen how the new committee will add value in this regard. In the last fiscal year, Pakistan received less than $1.5 billion in foreign direct investment, about a quarter less than the previous year.

A committee headed by Akhtar will propose a plan for fast track implementation of holistic power sector reforms. The prime minister also established a separate government committee on energy, which has a mandate to propose energy policy. The Economic Recovery Committee will consider policy measures to improve incomes and employment opportunities and overall economic growth over the medium term.

Pakistan's economic growth model is debt based and various studies suggest that economic growth of more than 3.8% results in fiscal deficit and current account deficit problems. For this fiscal year, the previous government had targeted growth of 3.5%, but the IMF and the central bank put forward projections in the range of 2% to 3%.

The economic landscape, once shaken by the far-reaching effects of the global pandemic, now stands on the precipice of transformation. This article delves into the essential components of an effective economic recovery strategy, focusing on key elements that can guide nations toward a robust and resilient future.

1. Sector diversification

One of the fundamental lessons from recent crises is the importance of industry diversification. Heavy reliance on a single sector can make economies vulnerable to sudden outages. Governments now recognize the need to cultivate a diversified portfolio of industries that can collectively contribute to stable economic growth. By nurturing sectors such as technology, healthcare, renewable energy and advanced manufacturing, countries can build a more balanced and adaptive economy.

2. Investment in infrastructure

Strategic investments in infrastructure projects are the cornerstone of economic recovery. Modernizing transport networks, energy systems and digital connectivity not only creates immediate job opportunities, but also lays the foundations for sustained growth. Improved infrastructure increases a nation's competitiveness, attracts foreign investment, and fosters innovation, thereby stimulating a positive feedback loop for economic progress.

3. Support for small and medium-sized enterprises (SMEs)

SMEs play a key role in economic recovery thanks to their ability to quickly adapt, innovate and create jobs. Providing tailored financial assistance, simplifying regulatory processes and offering targeted training can enable SMEs to regain their footing and make a significant contribution to economic recovery. These businesses form the backbone of local economies and can create a ripple effect that drives recovery from the local level.

4. Embracing digital transformation

The pandemic has underscored the urgency of digital transformation in all industries. Nations that favor technological integration are better equipped to weather the vagaries of the weather and ensure sustained growth. E-commerce, working from home and the provision of digital services are no longer optional but essential components of a resilient economy. Governments should create an enabling environment for technological innovation through incentives, policies and investment in R&D.

5. Sustainable practices and green initiatives

Economic recovery should not come at the cost of environmental degradation. Incorporating sustainable practices and adopting green initiatives is essential for long-term prosperity. By investing in renewable energy sources, promoting circular economies, and implementing environmentally friendly policies, states can not only mitigate climate change, but also tap into emerging markets focused on sustainability.

6. Global cooperation and trade

International cooperation and open trade play a key role in economic recovery. Establishing and maintaining diplomatic relations, trade agreements and partnerships can expand markets for goods and services. Engaging in global collaboration increases a nation's resilience by diversifying income streams and promoting the exchange of knowledge and best practices.

As the world charts its path to economic recovery, a multi-pronged approach is essential. By embracing industrial diversification, investing in infrastructure, empowering SMEs, supporting digital transformation, practicing sustainability and promoting global collaboration with nations, they can put themselves on a trajectory of resilience and growth. Learning from adversity provides a unique opportunity to reshape economies and ensure they are not only robust but also adaptable to future challenges. A brighter economic future awaits thanks to joint efforts and progressive strategies.

In the wake of unprecedented global challenges, the imperative to achieve economic recovery has come into focus. Formulating effective strategies to revive the economy has become more important than ever. This article delves into the key strategies that are shaping the shaping of economic recovery in the current landscape.

Understanding the need for economic recovery

The global landscape has witnessed disruption of an unparalleled scale due to factors such as pandemics, trade imbalances and technological changes. As economies face these challenges, the need to revive and strengthen them has become a priority. A well-crafted economic recovery strategy is essential not only to regain lost ground, but also to build resilience against future shocks.

**1. Diversification: the foundation for resilience

Economic recovery starts with diversification. Heavy reliance on a single industry or market can make an economy vulnerable to sudden shocks. The formulation of a resilient economic landscape includes diversification of sectors, sources of income and business partners. By supporting a portfolio of sectors that complement each other, economies can create a safety net to cushion the impact of a downturn in any one sector.

2. Investment in infrastructure: paving the way forward

Strategic investment in infrastructure is akin to building the backbone of economic recovery. Modernizing transport networks, energy systems and digital infrastructure not only stimulates job creation, but also increases the capacity for sustainable growth. Modern and efficient infrastructure attracts foreign investment, facilitates smoother business operations and paves the way for innovation-based economic progress.

3. Strengthening the position of small and medium-sized enterprises (SMEs)

Small and medium-sized enterprises play an integral role in economic recovery. They are agile, adaptable and often deeply rooted in local communities. Formulating policies that provide financial support, streamline regulations and offer skills development can reignite these engines of economic growth. SMEs create jobs, support entrepreneurship and contribute to a more inclusive and balanced recovery.

4. Digital transformation: catalyzing growth

The digital age is an opportunity that cannot be ignored. The formations of economic revival are increasingly linked to the adoption of digital technologies. The introduction of e-commerce, digital marketing and automation not only increases operational efficiency but also expands market reach. Governments and businesses alike must prioritize digital upskilling, technological innovation and cybersecurity measures to ensure a thriving digital ecosystem.

5. Sustainability as a cornerstone

Economic recovery must be sustainable to ensure longevity. Creating a resilient economy requires a commitment to environmentally friendly practices and green initiatives. Investing in renewable energy sources, adopting circular economy principles and following environmentally friendly policies not only contribute to the well-being of the planet, but also contribute to emerging markets focused on sustainability.

6. Global Collaborations for Resurgence

International cooperation and business partnerships are a tool for shaping the formations of economic recovery. Diplomatic ties, trade agreements and cooperative initiatives expand market access and increase economic resilience. Engaging in global dialogues fosters the exchange of ideas, technologies and solutions and strengthens economies against uncertainties.

Shaping economic recovery is a dynamic process that requires foresight, adaptability and collaboration. By embracing diversification, investing in infrastructure, empowering SMEs, managing digital transformation, prioritizing sustainability and fostering global partnerships, nations can lay the foundations for a resilient and prosperous future. The formations created today will determine the trajectory of economies and ensure that they are equipped not only to bounce back but also to thrive amid the challenges on the horizon.