(MENAFN- Khaleej Times) Â While popular demands and aspirations rise sky-high, Pakistan's newly-elected Prime Minister unveils plans to overcome acute energy crisis, boost economy and encourage foreign friends and investors of Pakistan.
Sharif has too much on his platter - left largely by the outgoing government of Pakistan People's Party. It ranges from massive government, institutional and personal corruption freely indulged-in by the rulers, to massive electric and gas shortages and lack of education with more than 25 million children without schools. The GDP is reduced to half at 2.5 per cent. The previous government's claim to have reduced the inflation to 5.1 per cent from 25 per cent, is at best, laughable as food, house rents, medical treatment expenditure rose to a record high.
But as soon as foreign and domestic investors and business saw Shrif's Pakistan Muslim League (Nawaz) winning the Parliamentary polls, the bourses broke all records. The main bourse - Karachi Stock Exchange KSE-100 index - crossed 22,800 plus points from the five-year early record of 4,000.
"Our key confidence pusher is Mr Sharif and his new team of ministers, who are pro-business and pro-growth," said head of a foreign equity corporation.
Pakistan's foreign friends, ranging from the UAE and Saudi Arabia to China, all are welcoming the new government, its pro-business leadership with a good record of business and diplomatic relations.
Sharif, on his election by the National Assembly as Prime Minister, pledged to form "a common agenda with all political allies and foes to wade through a jungle of problems that have grown in Pakistan." These, he said, include electricity shortages and prolonged industrial and domestic outages, international terrorism, poverty, corruption, setback to agriculture and industry and a woeful backlog of infrastructure building."
"These are among the major priorities that my government will tackle relentlessly," he told the Parliament.
"The national leadership should be on he same page," said Sharif as part of his policy of cooperation and reconciliation with all political parties and groups.
Sharif announced building of rail-and-road network between Kashgar, Western China and Chinese-built massive port of Gwadar in South-stern Pakistan, located on the lip of Straits of Hurmoz, which will connect it and go on to UAE and the Middle East. In the North it will connect Central Asian Republics and EU. This huge project has the potential of multiplying business several hundred fold, in this largely untapped region. It will be a bright star of business - located between EU in the West and Asean-Japan in the Far East-East. During his just-concluded visit to Pakistan and meeting with the Pakistani leader, Chinese Prime Minister Li Keqiang assured that China was ready to lay rail track and road from China to Gwadar-Karachi.
The new Prime Minister plans to invite massive foreign investment in electricity and natural gas, including import of furnace and diesel oil, new power generating equipment, and machinery for wind and solar systems. Along with these imports and inflows will be top level business firms and experts who my also be given top jobs, in new ventures, as well s by privatising the nationalised corporations.
These will be in various fields ranging from airlines to steel, gas plants to hydel power and power-generation and distribution companies. Several of these plans have already been unveiled. Here lies the big opportunity for foreign investors, suppliers of all types of plant and machinery and highly qualified foreign experts and technical hands.
All FDI, investments, inflows and dividends-profits are repatriable on a 100-per cent basis whenever the foreign investors wish to do so, or plan to wind up their business. Even before the election results were coming out and Shrif appeared sure to be winning more than $500 million FDI and portfolio investment poured in to benefit from the projected profits and a major boost in the bourses and the equity market.
All these plans are sound and highly profitable. But what the new PM has on his platter is not a story of roses and honey all the way. Take massive government borrowing by the outgoing and defeated government. The previous government's borrowing in five years was equal to the previous borrowing done in 60 years. Pakistan's foreign debts have soared to $60 billion. Its internal debt rose to Rs8,800 billion - which went into wasteful government expenditure and meet the five year budget deficit. Forex reserves are down to $6.58 billion this year. The FDI and portfolio investment was down to $850 million, while the trade deficit widened to $12.54 billion, as exports stagnated, and imports rose. The current deficit is two per cent of GDP. The financial deficit has reached an all-times high of 8.5 per cent of GDP. The non-performing or stuck up loans repayable by the business to the banks are a whopping Rs1.8 trillion, as borrowers faced bad businesses, industry shutdowns or labor strike in companies shut down by power and gas outages.
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