ISLAMABAD: Well-functioning markets is a prerequisite for smooth and efficient transactions which in turn encourage long-term economic growth and stability, said Dr. Nadeem ul Haq, Vice-Chancellor of Pakistan Institute of Development Economics (PIDE).
Explaining the market characteristics, he said complete information, solvent agents, well-defined rights, and transactions were the essentials. However, these characteristics are mostly unsatisfactory in the case of Pakistan.
‘’Enhancing the competitiveness of three important markets – agriculture, real estate and energy – requires the adoption and implementation of prudent measures,’’ he said.
Agriculture, the backbone of rural economy, has enormous potential to resolve the country’s economic woes through expanding exports, reducing dependence on imports, and driving growth in other sectors, said State Minister for Industries and Production Tasneem Ahmad Qureshi while addressing the closing ceremony of a training course on “Productivity gainsharing in agribusiness enterprises” in Islamabad recently.
Pakistan’s agriculture sector is short on growth and productivity compared to many other countries. The most commonly cited constraints include limited use of high-yielding seeds, obsolete farm practices, soil infertility, inadequate water availability, farmers’ poor access to agricultural credit, and higher input cost.
Moreover, this sector has been hit hard by heightened inflation, high electricity tariff, and torrential rainfall in 2022.
To leverage the potential of the sector, the department concerned must encourage modern farming practices, address the water scarcity issue, and implement innovative agricultural technologies. In addition, the development of a comprehensive agriculture strategic framework with a clear vision is also necessary.
The real estate sector is witnessing a reduced demand, decreased investment, and slower construction activity.
Talking to INP-WealthPk, Managing Director of Gold Land Estate and Builders Junaid Alam said price hike, rapid free fall of the rupee, and lack of planning were impacting long-term growth of the sector.
‘’Pakistan has got a great potential but due to the aforementioned issues, we are unable to realize that,’’ he added.
The energy sector remains one of the main obstacles to economic growth. Greater reliance on expensive and imported energy products, circular debt, insufficient transmission system, and lack of long-term energy planning has prevented this sector from expansion and modernization.
‘’Owing to the developments in the global energy market since early 2022, a new situation has evolved for the countries dependent on imported energy like Pakistan. Coal and gas prices have almost doubled, increasing electricity generation costs and consumer prices,” said the PIDE research economist Saddam Hussein.
Considering the prevailing sector situation, Pakistan must pursue a more ambitious plan to tap its renewable energy potential to significantly reduce energy imports. Adherence to strict energy conservation measures will provide considerable relief to Pakistan’s external and fiscal finances.