Industrialization through SMEs - must do for economic comeback.

• Author: Asghar, Arooj

Byline: Arooj Asghar

Pakistan is facing numerous challenges, which is not new for this country. The economic situation in Pakistan today is indeed worrying, even last Economic Survey of Pakistan also painted a dismal picture of the domestic economy. Almost all financial indicators have seen a downward trend. The growth rate fell by more than 50 percent from almost 6 percent to less than 3 percent. It is expected to go down even further to 2.4 percent next year, which will be the country's lowest in the past 10 years.

The Pakistani rupee has lost a fifth of its value against the dollar since the beginning of this fiscal year. State Bank of Pakistan (SBP) is continuously projecting high inflation in next two years and thereafter it is expecting drop in inflation. Then there is a mega issue of the ever-increasing debt, which eats up more than 30 percent of government's resource every year. Once again, Pakistan has approached International Monetary Fund (IMF) for a bailout package. The recent IMF package is getting mixed views in Pakistan and so far government is struggling to make a balance between IMF restrictions and the expectations of business community.

Industrial production in Pakistan decreased 3.25 percent in July of 2019 over the same month in the previous year. Industrial production in Pakistan averaged 5.01 percent from 1990 until 2019, reaching an all time high of 35.15 percent in April of 1991 and a record low of -21.82 percent in April of 2000.

In current economic environment, large scale investment on big or mega projects seem difficult therefore, government should focus on Small and Medium-sized Enterprises (SMEs). The SME share in manufacturing value added can be much higher and can go up to 70 percent of totaling value-added generated by the manufacturing industries sector. Further as important sources of new business creation and developing new entrepreneurial talents, these industries can provide the much needed dynamism and vitality to the national economy.

There are some people who are favorite of media and we find them on every channel since 2011. They are continuously raising concerns on debt taken by the last two governments. The biggest concern is where state had spent all the taken debt, which projects had been developed by that money and why Pakistan is under debt of around US$100 billion. I wouldn't say there is no corruption in the country but the debt taken by the state of Pakistan was from multilaterals, various...