Articulate Vol 12 June 2021

An initiative by CSSExamDesk.
com
Articulate for CSS 2022

June 2021 (Volume - 12)
Hot Topics inside —

1. Indian nuclear proliferation
2. CPEC — fallacies and realities
3. The paradox of energy transition
4. Pakistan's digital transformation
5. Salient features of Budget 2021-22
6. Economic Survey 2020-21 — Simplified
7. Civil services: a national security threat?
8. Political consensus for economic goals
9. Proposed peace plan for South Asia
10. Governance through sustained development
Compiled & Edited by Aamir Mahar

01
01 Economic Survey 2020-21 — Simplified
Despite myriad of challenges, Pakistan’s economy is moving progressively on higher inclusive and
sustainable growth path on the back of various measures and achievements during the year. Major
achievements highlighting the economic performance during FY2021 are mentioned below:
1) Pakistan was implementing stabilization policy post crisis of 2017-18 and the economy was
recovering from macroeconomic imbalances but COVID-19 slowed down the pace which was
recovered initially but the advent of 2nd and 3rd wave brought significant challenges which were
met by the timely prudent policies.
2) Pandemics like COVID-19 are once-in-a-century event that devastate global economies. Pakistan
did much better in coping up with the pandemic compared to many countries.
3) Government took several important policy decisions: monetary and fiscal measures, smart
lockdowns, rapid vaccination etc. National Command and Operating Centre (NCOC) as a single
organization was made responsible to take key decisions in collaboration with the provinces.
Situation was put under control due to government’s timely decision making, numbers of daily
COVID-19 cases are presently on declining trend.
4) Prior to COVID-19, the working population was 55.74 million. This number declined to 35.04
million which indicates people either lost their jobs or were not able to work. Due to prudent
decisions by the government, working population reached 52.56 million till October, 2020.
5) Economy has witnessed a V - shaped recovery. The current economic recovery has been achieved
without compromising internal and external stability.
6) Manufacturing has witnessed broad-based growth as major sectors of LSM have shown
significant improvement i.e., Textile, Food Beverages & Tobacco, Non-Metallic Mineral Products
and Automobile. First nine months of FY2021 recorded highest period wise growth of 8.99
percent since FY2007.
7) Current account posted a surplus of $ 0.8 billion, during July-April, FY2021 for the first time in 17
years.
8) Inflows of foreign exchange through the Roshan Digital Account (RDA) crossed the $1 billion
mark. During July-April FY2021, workers’ remittances posted historically high growth of 29
percent and reached to $ 24.2 billion.
9) SBP’s foreign exchange reserves rose to $16 billion, four-years high.
10) Keeping in view the significant performance pertaining to FATF conditions, potential of exports
and e-commerce, Pakistan has been added into the Amazon’s seller list.
11) FBR tax collection has witnessed a significant growth of around 18 percent during July-May
FY2021 owing to the revival of domestic economic activity and ongoing comprehensive tax policy
and administrative reforms.
12) Primary balance remained in surplus at 1.0 percent of GDP, highest level through the first three
quarters in 12 years.
13) On 27th May 2021, PSX witnessed an all-time high daily trading volume with 2.21 billion shares
traded in a single session.
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02
14) Due to its impressive growth, Pakistan Stock Exchange earned the title of being the best Asian
stock market and fourth best-performing market across the world in 2020.
15) Profile of domestic debt has improved significantly during the tenure of the present government
as short-term debt as percentage of total domestic debt has decreased to 23 percent at end March,
2021 compared with 54 percent at end June, 2018.
16) Over 80 percent of the net borrowing from domestic sources was through medium- to-long term
domestic debt instruments (Pakistan Investment Bonds & Government Ijara Sukuk) during first
nine months of FY2021.
17) Pakistan has entered the international capital market after a gap of over three years by
successfully raising $ 2.5 billion through Euro bonds.
18) The policy rate remained unchanged at 7.0 percent which improved business sentiments and thus
stimulating economic activities enabling employment to recover.
19) During July-February FY2021, the two gas utility companies (SNGPL & SSGCL) have laid 143 Km
gas transmission network, 2,616 Km distribution and 886 Km services lines and connected 70
villages/towns to the gas network. During the same period 304,573 additional gas connections
including 303,243 domestic, 1,020 commercial and 310 industrial connections were provided
across the country.
20) Installed capacity of electricity increased to 37,261 MW during July-April FY2021 compared to
same period last year, showing an addition of 1,289 MW. Likewise, its generation increased to
102,742 GWh showing an additional generation of 6,360 GWh during the period under discussion.
The share of Industry in electricity consumption has increased to 26.3 percent in July-March
FY2021 as compared to 25.5 percent in the same period last year.
21) Cellular mobile subscribers (number of active SIMs) in Pakistan have reached 182 million at the
end of March, 2021 compared to 167.3 million by the end of June, 2020 showing an increase of
8.6 percent in nine months of FY2021.
22) At end March, 2021 broadband (BB) subscribers reached to 100 million. The total BB penetration
in Pakistan stood at 47.6 percent in March, 2021 registering an increase of about 19.7 percent as
compared to end March, 2020.
23) Under Ehsaas Emergency Cash Programme, Rs 179.3 billion has been disbursed. Approximately
14.8 million families have been benefited from the programme. World Bank recognizes Ehsaas
Emergency Cash among top 4 social protection interventions globally in terms of number of
people covered.
24) Under Kamyab Jawan Youth Entrepreneurship Scheme, Rs 8,566 million has been disbursed till
April, 2021 to the youth for various businesses.
25) The 10 billion Tree Tsunami programme has achieved plantation of approximately 350 million
plants during July-March FY2021 and about 100,000 daily wagers have been employed till March,
2021. Cumulatively, over 800 million plants have been regenerated /planted in last two years.
26) IMF has acknowledged that the government policies have been critical in supporting the economy
and saving lives and livelihoods. The IMF and Pakistan have announced the resumption of stalled
$ 6 billion loan programme.
27) During the year, all three major credit rating agencies, Moody’s, Fitch and Standard & Poor’s,
reaffirmed their sovereign credit Ratings for Pakistan. This reaffirmation is reflective of the sound

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policies of the Government and of the confidence reposed by these leading international
institutions in the country’s economic outlook.
The overview of Pakistan Economic Survey 2020-21 contains three sub-sections i.e., Global Economic
Review, Pakistan Economic Review and Executive Summary.
The Global Economic Review briefly examines the state of the global economy and its prospects. This
sub-section emphasizes notable economic successes and events at global level. It also discusses the
challenges that may have an impact on the global growth projection. The second sub-section, Pakistan
Economic Review, presents a comprehensive analysis of current fiscal year’s economic performance
and major achievements across different sectors. While, the last sub-section, concisely presents a
summary of all sixteen chapters included in the Economic Survey. Thus, it provides readers with a
bird’s eye view of the domestic economic situation, prospects, achievements and challenges across
different sectors of the economy during the current fiscal year.
I. Global Economic Review
The COVID-19 outbreak that began in early 2020 has had a profound impact on the world economy.
The pandemic engulfed the whole world and ravaged the health care system of many developed
nations. Initially, the supply shock caused by the abrupt closing of businesses across the world
transformed into an unprecedented demand shock, which had socio-economic consequences.
COVID-19 pandemic triggered unprecedented restrictions not only on the movement of people but
also on a range of economic and financial activities. Supply chains and industries like tourism,
travelling, hotels and hospitality, transportation and education were severely impacted. The human
cost has been substantial, especially in developed countries despite being advanced in medical and
health systems. It had exposed the lack of capacity and strained healthcare systems around the world.
The health crisis has been accompanied by the deepest economic downturn since the Great
Depression, which has resulted in the loss of millions of jobs, closure of businesses and tipping
millions into extreme poverty. It has been a crisis like no other. The Great Lockdown decimated
livelihoods world-wide and pushed low-income households into abject poverty. However, to address
the dual crisis i.e. health and economic, countries all over the world responded swiftly with a variety
of policy measures; mostly in the form of monetary and fiscal interventions for the economy and
health measures for the pandemic. The objective was to salvage the economies from potential welfare
loss by compensating unemployed masses as well as businesses with the provision of necessary
assistance. Since the economic activity was at a standstill, these interventions helped economies in
managing the supply lines intact. On the monetary side, the central banks adopted expansionary
policy stances, quickly provided liquidity support and supported credit extension to a wide array of
borrowers. Simultaneously, on the fiscal side, governments helped households and businesses in the
form of transfers, furlough payments, wage subsidies and liquidity support. These measures were
supplemented with other aspects of social safety nets like unemployment insurance and nutrition
assistance. All these actions contributed significantly to lessen the economic impact of COVID-19.
Policy actions such as automatic stabilizers, discretionary measures and financial sector measures,
helped the global economy from further deterioration. In absence of these measures, the global
growth recession last year could have been three times worse. The global growth was estimated to
contract by 3.3 percent in 2020 with the worst affected economies being the USA (-3.5 percent), UK
(-9.9 percent), Japan (-4.8 percent), Germany (-4.9 percent), France (-8.9 percent) and India (-8.0
percent), etc. While China experienced a positive but slowed growth rate of 2.3 percent in 2020,
which was below the level seen in 2019. The global economy is expected to rebound in 2021 and 2022,
with an expected growth of 6 percent in 2021 and moderate growth of 4.4 percent in 2022. The
rebound in 2021 and 2022 is expected, owing primarily to advanced economies, including a notable

04
improvement in the USA, which is expected to grow at 6.4 percent this year. Other advanced
economies, such as the Euro Zone, will rebound as well, but at a slower rate. China is expected to grow
at 8.4 percent in 2021 which has already started to return to pre-pandemic levels in 2020, which
many other countries are not expected to do until 2023. The global outlook faces significant
challenges due to divergences in the speed of recovery within and across countries, reflecting
variation in pandemic-induced disruptions and the extent of policy support. The global community
continued to face challenges for mitigation both on the social and economic front even after one and a
half years of the COVID-19 pandemic setting in. Even after extensive assistance and a recovery that
has been underway since mid-2020, unemployment and underemployment remained high. The
vaccination has begun in most countries, holding the promise of eventual reductions in the severity
and frequency of infections. Coverage varies considerably so far and countries are expected to achieve
widespread inoculation at different times. However, new virus mutations and the accumulating
human toll posed significant concerns for the global economic outlook. The global outlook is
dependent on the severity of the health crisis, the efficacy of the vaccine against new COVID-19
strains, successful implementation of well-coordinated economic policies and the development of
financial conditions. The speed of recovery and the extent of medium-term damage will be
determined by the variation of these drivers and their relationship with country-specific
characteristics.
II. Pakistan Economic Review
Pakistan’s economy already had volatile growth pattern over the years, with regular boom and bust
cycles facing challenges in achieving long-term and inclusive growth. Unsustainable economic growth
was caused by unaddressed long-standing structural issues for example, loss-making State-Owned
Enterprises (SOEs), weak external position due to insufficient export capacity and low FDI,
under-reformed energy sector, low savings and investment. In the backdrop of these challenges, the
present government focused on an economic vision of getting sustainable economic growth through
improving efficiency, reducing cost of doing business, improving regulatory environment, enhancing
productivity and increasing investment. Even before the COVID-19 pandemic hit Pakistan’s economy,
the government started implementing decisive and far-reaching reforms in every sector of the
economy. The reforms started to address the economic imbalances and laid the foundation for
improved economic performance in terms of strengthened fiscal and external accounts, exchange rate
stability and improved investor’s confidence. Moreover, inflation started to stabilize and market
confidence gradually recovered. These reforms paved the way for long-term growth and to end the
unsustainable growth pattern that has plagued the economy in the past. The FY2021 began in the
midst of the most severe global health crisis experienced in modern history. Pakistan’s economy, like
rest of the world, has struggled to combat the economic consequences of COVID-19 shock through
prompt measures for supporting the economy and saving the lives and livelihoods. Besides, virus
containment measures, the government has implemented a comprehensive set of measures including
the largest ever economic stimulus package of Rs 1,240 billion, a construction package, an expansion
of the social safety net to protect the vulnerable segments of the society and supportive monetary
policy stance along with targeted financial initiatives. These measures helped the economy in
lessening the negative impact of the pandemic. In contrast to other world economies, Pakistan started
witnessing recovery during the first half of FY2021 on the back of continued domestic economic
activity due to the above stated measures along with a smart lockdown policy. As Pakistan
successfully subsided the first wave of COVID-19 during the summer of 2020 through effective
containment measures, the country was hit by the second wave in the fall of 2020. However, smart
lockdowns and improved containment strategies aided in managing the reported cases and the
resumption of economic activities. However, Pakistan is currently experiencing the third and most

05
virulent wave of pandemic. Smart lockdowns and drastic measures on pandemic response front
allowed the continuity of economic activities and supported the ongoing recovery. Amid the second
and third waves of COVID-19, continuing accommodative fiscal and monetary policies helped the
economy to move on faster recovery. The impact of the government’s timely and appropriate
measures is visible in the form of a V-shaped economic recovery on the back of broad-based growth
across all sectors. The provisional GDP growth rate for FY2021 is estimated at 3.94 percent, higher
than the targeted growth of 2.1 percent, for the outgoing fiscal year. The government is monitoring the
country’s situation actively and is taking necessary measures to facilitate agriculture and industry
sectors to avoid the downside risk and to further accelerate the economic recovery. The GDP growth is
based on 2.77, 3.57 and 4.43 percent growth in agriculture, industrial and services sector, respectively.
In order to uplift the agriculture sector, the National Agriculture Emergency Programme with a cost
of Rs 277 billion is already underway. Under this programme, 13 mega projects are under execution.
During FY2021, the government also announced the “Rabi Package” of Rs 5.4 billion to reduce the
input cost for the farmers with the special intent to increase the production of wheat in the country. In
addition, the Minimum Support Price of wheat has been further enhanced from Rs 1,400 to Rs 1,800
per 40 kg to encourage wheat cultivation. Similarly, the agriculture credit disbursement target for the
current fiscal year has been set at Rs 1,500 billion. These measures have borne the fruit in terms of
significant growth in major and minor crops. On the industrial front, there was a significant rebound
in economic activity, as Large-Scale Manufacturing (LSM) gained traction. The industrial sector has
witnessed a remarkable turnaround largely because of accommodative policies by the government in
the form of industrial support packages; relief to export-oriented industries, duty exemption under
China-Pak Free Trade Agreement-II, electricity and gas subsidy for the export-oriented industries and
tax exemptions for electric vehicles manufacturers. The government’s incentives for the construction
sector provided the impetus for its allied manufacturing segments. The cement industry has been
given special attention by reduction of Federal Excise Duty to Rs 1.5/kg from Rs 2/kg. A National
SME Policy Action Plan 2020 has been approved to provide much-needed support to SMEs. These
measures enabled the resumption of business activities. The strong growth in the construction and
LSM sector is likely to further broaden the recovery through the spillover effect. On the external front,
the current account balance remained in surplus during the first ten months of FY2021 due to strong
growth in remittances and an ongoing pickup in exports. Remittances witnessed a remarkable growth
as more formal channels were opted due to restrictions imposed on informal means in the wake of
COVID-19. Most importantly, measures undertaken as part of anti-money laundering regulations in
accordance with FATF recommendations have also facilitated a shift from informal to formal
channels of sending remittances. Similarly, efforts under the Pakistan Remittances Initiative (PRI)
and the gradual re-opening of businesses in major host countries such as the Middle East, UK and the
USA also played their part in giving a boost to the remittances. Added with this, timely resumption of
economic activities helped the export sector performed relatively better than other emerging
economies; both of which led to an improvement in the external sector. It is worth mentioning here
that under the IMF programme there are better prospects for the external sector which ensures that
the external financing needs will be comfortably met. On fiscal side, a substantial increase in tax
collection and effective management of expenditures helped in containing the fiscal deficit as a
percentage of GDP, while the primary balance continues to remain in surplus. The fiscal performance
during (July-March) FY2021 shows that the fiscal consolidation policy helped in achieving fiscal
discipline, increasing revenues and controlling expenditures. Especially, FBR tax collection has
witnessed a double-digit growth during (July-April) FY2021 reflecting growth in economic activities
despite the challenge of the third wave of COVID-19. During FY2021, SBP maintained the policy rate
at 7.0 percent. The existing stance of monetary policy remained appropriate to support the economic
recovery with inflation expectations well-anchored and maintaining financial stability. It is pertinent
to mention that inflation all over the world remained volatile mainly due to supply-side disruptions in

06
commodities due to the COVID-19 pandemic. Rising international prices are putting pressure on
domestic prices. Global food prices are at their highest in a decade (FAO). The government is closely
monitoring the supply and demand for essential food commodities to mitigate the impact of
international inflationary pressures and ensure a smooth supply of commodities. Similarly, the
government is making all possible efforts to combat profiteering and hoarding, as well as providing
essential commodities at affordable prices through establishing Sasta Bazaars and providing subsidies
on essential food items at the Utility Stores. Pakistan is blessed with natural as well as human
resources. Investing in human capital through skill development programme will ensure long term
inclusive growth and decrease the unemployment rate. Cognizant of this fact, the government is
focused to facilitate and produce opportunities for employment and financial inclusion of young
people so they can play a constructive role in enhancing Pakistan’s position in the global markets. In
order to bridge the gap between educated and active labour market participation, the government has
introduced Prime Minister’s “Kamyab Jawan Youth Entrepreneurship Scheme” and “Prime Minister’s
Hunarmand Programme-Skills for All” programmes. Similarly, many other short and long-term
initiatives, are underway such as National Agriculture Emergency Programme, Naya Pakistan
Housing Programme and Ten Billion Tree Tsunami Programme to accommodate the youth bulge.
These Programmes will not only boost economic activities in the country but will also be helpful for
the socio-economic betterment of youth and deprived segments of society. Pakistan has launched the
largest-ever social protection and poverty eradication programme i.e., Ehsaas. This programme is
unique in terms of coverage, policy formulation, multi-sectoral nature, monitoring framework and
increased funding to deliver the programme across the country. It consists of over 140 sub
programmes, policies and initiatives centered on a holistic approach to poverty alleviation. Over the
course of two years, Ehsaas has received widespread global acclaim at numerous international events
hosted by the UN, ADB, World Bank, UNDP and others. The Ehsaas programme has recently reached
a new milestone when the World Bank included the Ehsaas Emergency Cash Programme in a list of
the top four global social protection interventions in terms of number of people covered. In addition
to the above, Pakistan has entered the international capital market after a gap of over three years by
successfully raising $ 2.5 billion through a multi-tranche transaction of 5, 10 and 30 year Eurobonds
under its first-ever Global Medium Term Note Programme. The IMF and Pakistan have announced
the resumption of a stalled $ 6 billion loan programme as the IMF Board’s decision allowed for an
immediate disbursement of SDR 350 million (about $ 500 million). IMF has acknowledged that while
the COVID-19 pandemic continues to pose challenges, the government policies have been critical in
supporting the economy and saving lives and livelihoods. Today, the economy is steadily progressing
towards more sustainable and inclusive growth path. The performance in agriculture, LSM,
construction and exports sectors are amongst the key success stories. The current account balance is
in surplus, fiscal deficit is manageable with the primary balance in surplus, the rupee is stable and
foreign exchange reserves (SBP and commercial) have reached $ 23.2 billion (as of 3rd June 2021).
Most importantly, the government has effectively managed the pandemic through swift policy
measures. With current year performance, it is expected that the economy will grow by 5 percent in
FY2022 and will accelerate further over the medium term. The performance clearly shows that the
economy is improving in the post-COVID-19 era. The start of vaccination has raised hopes of a
turnaround in the pandemic later this year, however, the third wave with new variants of the virus has
posed concerns for the outlook. Nevertheless, the government is vigilant and responding efficiently to
restrain the surge of the COVID-19 virus. Social protection systems are also evolving especially to
cover all vulnerable segments. The government’s prompt response eased the miseries of the most
vulnerable segments of society. The business confidence has returned and economic activity is slowly
getting back to normal. It is expected that macroeconomic stabilization measures and structural
reforms supported by international development partners will help the economy to move on a higher
and sustainable growth trajectory.

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III. EXECUTIVE SUMMARY
1. Growth and Investment The economy of Pakistan rebounded strongly in FY2021 and posted
growth of 3.94 percent which is not only substantially higher than the previous two years (-0.47
and 2.08 percent in FY2020 and FY2019 respectively) but also surpassed the target (2.1 percent
for FY2021). Despite strict fiscal constraints, timely and appropriate policy measures taken by the
government resulted in a V-Shaped economic recovery. The beginning of FY2021 was better in
terms of containment of pandemic and economic recovery, however the second wave in late
October 2020 and the third wave in March 2021 made government efforts more challenging for
containing the pandemic and keeping the economic activities to continue. Regardless of fiscal
constraints, relief provision to vulnerable segments and growth support was the government’s
utmost priority. According to the World Bank report on “Social Protection and Jobs Responses to
COVID-19: A Real-Time Review of Country Measures” published on May 14, 2021, Pakistan was
ranked Fourth in terms of a number of people covered while Third in terms of the percentage of
population covered. Pakistan’s economy is now on course towards strong and sustained recovery.
The pandemic resulted in lockdown and depressed demand. Adequate government policies were
implemented to keep economy moving. Utilization of unused industrial capacities during the
pandemic also helped in economic recovery. On the basis of a rebound in almost all sectors, for
FY2021, the provisional GDP growth rate is estimated at 3.9 percent on account of 2.8 percent
growth in Agriculture, 3.6 percent in the Industrial sector and 4.4 percent growth in the Services
sector. Moreover, GDP at current market prices stood at Rs 47,709 billion, showing a growth of
14.8 percent during FY2021 over last year (Rs 41,556 billion). While in the dollar term, it
remained $ 299 billion which is higher than its value recorded last year ($ 263 billion). Private
Consumption has a significantly large share in GDP. This large share implies that Pakistan’s
economy is a consumption-driven economy. Better consumer confidence can influence domestic
production by increasing demand for durable. Growth in private consumption remained 17
percent in FY2021 as compared to 4 percent last year. On the other hand, growth in Public
Consumption remained 11.4 percent, lower than 19.3 percent recorded last year, mainly due to
lower growth in interest payments and squeezing of unnecessary expenditures. Gross Fixed
Capital Formation (GFCF) posted a growth of 13.8 percent in FY2021 and remained 13.6 percent
of GDP. Private and public including the General Government being two major components of
GFCF posted a growth of 6.6 percent and 38.1 percent, respectively. In aggregate demand,
historically contribution of Net Exports usually remained negative. For FY2021, in National
Accounts, Exports of Goods and Services posted a growth of 13.6 percent while Imports of Goods
and Services posted growth of 20.1 percent. However, for current year, capital goods and raw
materials were the main imports which in turn helped in the growth of exports as well as domestic
economic recovery. FY2019 was an era of stabilization, while FY2020 was not only humanitarian
crisis but economy also suffered contraction. Economic growth remained 3.94 percent in FY2021
posting quicker significant economic recovery which can be attributed to three factors. (i) The
government made better management in controlling the pandemic which kept businesses going
on and confidence high in FY2021. (ii) Fiscal Stimulus of Rs 1.24 trillion along with monetary
support given in the pandemic. (iii) Due to quicker vaccination which supported economic
recovery earlier than expected.
2. Agriculture The agriculture sector’s performance during 2020-21 broadly stands encouraging as
it grows by 2.77 percent against the target of 2.8 percent. The growth of important crops (wheat,
rice, sugarcane, maize and cotton) during the year is 4.65 percent. The production of major Kharif
crops 2020, such as sugarcane, maize and rice indicated considerable improvement compared to
last year and surpassed the production targets. The production of sugarcane increased by 22.0

08
percent to 81.009 million tonnes from 66.380 million tonnes, rice by 13.6 percent to 8.419 million
tonnes from 7.414 million tonnes and maize by 7.4 percent to 8.465 million tonnes from 7.883
million tonnes. However, the cotton crop suffered mainly due to decline in area sown, heavy
monsoon rains and pest attacks. The cotton production reduced by 22.8 percent to 7.064 million
bales from 9.148 million bales last year. Wheat is the most important crop of “Rabi”, which
showed growth of 8.1 percent and reached record high production level of 27.293 million tonnes
compared to 25.248 million tonnes last year. For the Rabi crops 2020-21, the government
provided a comprehensive “Rabi Package” comprising of subsidies on fertilizer, fungicides and
weedicides, together with an increase in the Minimum Support Price (MSP) of wheat to Rs 1,800
per 40 Kg. Other crops having a share of 11.69 percent in agriculture value addition and 2.24
percent in GDP, showed growth of 1.41 percent because of increase in production of fodder,
vegetables and fruits. Cotton ginning declined by 15.58 percent due to fall in the production of
cotton crop. The overall crops sector, having a share of 35.81 percent in agriculture value addition
and 6.87 percent in GDP, witnessed a growth of 2.47 percent. Water availability during Kharif
2020 remained at 65.1 million acre feet (MAF) showing a slight decrease of 0.2 percent compared
to 65.2 MAF of Kharif 2019. Rabi season 2020-21 received 31.2 MAF, showing an increase of 6.9
percent over Rabi 2019-20. Domestic production of fertilizer during FY2021 (July-March)
increased by 5.9 percent over the same period of the previous year mainly due to increase in
supply of additional gas. There was an upsurge in total off-take of fertilizer nutrients by 15.2
percent largely due to upward revision in support price of wheat and decrease in the price of urea
by 12 percent. During FY2021 (July-March), total tractor production was 36,653 compared to
23,266 produced last year, an increase of 57.5 percent. The production increase was largely due to
an improved liquidity position of farmers. The agriculture lending institutions have disbursed Rs
953.7 billion during July-March, FY2021 which is 63.6 percent of the overall annual target of Rs
1,500 billion and 4.6 percent higher than the disbursement of Rs 912.2 billion made during the
same period last year. Livestock having a share of 60.07 percent in agriculture and 11.53 percent
in GDP, achieved a growth of 3.06 percent. The fishing sector, with a share of 2.01 percent in
agriculture value addition and 0.39 percent in GDP, grew by 0.73 percent, while forestry sector
having share of 2.10 percent in agriculture and 0.40 percent in GDP, grew by 1.42 percent.
3. Manufacturing and Mining The Large-Scale Manufacturing (LSM) performance has been
much favorable during July-March FY2021 and witnessed 8.99 percent growth as compared to 5.1
percent decline during the same period last year. The government’s thoughtful decision to resume
the business activities and adoption of smart lockdown boosted the business sentiments and the
economy gained traction after witnessing a hefty decline in FY2020. Targeted fiscal and monetary
incentives accompanied by related support packages helped speed up the economic recovery. Out
of 15 subsectors, nine posted growth during July-March FY2021. Textile and Food Beverages &
Tobacco, the top two sectors of LSM, grew by 5.9 and 11.7 percent, respectively. Coke & Petroleum
Products, Non-metallic Mineral Products, Automobile and Pharmaceuticals also grew by 12.71,
24.31, 23.38 and 12.57 percent, respectively. The Mining and Quarrying sector declined by 6.49
percent during FY2021, against 8.28 percent contraction last year. This sector is lagging behind
despite huge potential due to interconnected and cross-cutting issues like poor regulatory
framework, insufficient infrastructure at mines sites, outdated technology installed, semi-skilled
labor, low financial support and lack of marketing. During July-March FY2021, production of
major minerals plunged such as Coal, Natural Gas and Crude Oil declined by 5.97, 4.70 and 6.72
percent, respectively. However, some minerals witnessed positive growth during the period under
review such as Chromite 28.28 percent, Magnesite 6.17 percent, Rock Salt 5.44 percent and Iron
Ore 26.23 percent.

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4. Fiscal Development The fiscal sector has witnessed significant challenges due to additional
expenditures made to lessen the negative impact of COVID-19. However, the government’s fiscal
consolidation efforts provided significant support in maintaining fiscal discipline, increasing
revenues and controlling expenditures, thus the fiscal sector continued to perform better. The
fiscal deficit was contained at 3.5 percent of GDP during July-March FY2021 against 4.1 percent
of GDP in the same period of last year. The primary balance posted a surplus of Rs 451.8 billion
during July-March, FY2021 against the surplus of Rs 193.5 billion in same period last year. The
FBR tax collection witnessed a significant rise in ten months. During July-April, FY2021 the total
collection grew by 14.4 percent to stand at Rs 3,780.3 billion against Rs 3,303.4 billion in the
same period of FY2020. Encouragingly, the tax collection surpassed the target by more than Rs
100 billion during the period under review. The revenue performance is not only a reflection of
growing economic activities without any disruption even in the wake of the third wave of
COVID-19, but it also suggests that the efforts to improve the tax collection through various policy
and administrative reforms are bearing the fruits. The non-tax revenues stood at Rs 1,227.6
billion during July-March FY2021 against Rs 1,324.4 billion in the same period of last year,
showing a decline of 7.3 percent. The decline is mainly attributed to the absence of a one-off
renewal fee for GSM licenses from telecommunication companies. The efficient expenditure
management effectively curtailed the overall expenditures during the current fiscal year. Total
expenditures grew by 4.2 percent during July-March FY2021 as compared with the growth of 15.8
percent observed in the same period of FY2020. Presently, the fiscal policy measures are mainly
focused on relief measures to support businesses and to protect vulnerable segments of society.
Simultaneously, the government is focused on containing the fiscal deficit at a manageable level
and keeping the primary balance at a sustainable level. The fiscal performance during the first
three quarters of FY2021 is satisfactory. However, challenges to fiscal performance still persist
which largely depend on the domestic and international evolution of COVID-19 and its perils for
the economy. Nevertheless, effective revenue mobilization and prudent expenditure management
strategy would be supportive in coping with these challenges.
5. Money and Credit After the COVID-19 outbreak, the State Bank of Pakistan proactively
reduced the policy rate by a cumulative 625 bps from 13.25 percent to 7.0 percent, within almost 3
months between March and June 2020. The target of monetary policy was shifted towards
supporting growth and employment during the pandemic. During FY2021, SBP has continued
with an accommodative monetary policy stance with 7.0 percent policy rate which has supported
the economic recovery while keeping inflation expectations under control and safeguarding
financial stability. Besides sharply lowering the borrowing cost, SBP introduced a host of
measures aimed at supporting the businesses and households during the challenging time. These
measures, along with a fiscal stimulus package especially for revival of construction, led to a quick
turnaround in economic activity in the country during FY2021. During the period 1st July-30th
April, FY2021 Broad money witnessed an expansion of Rs 1, 664.8 billion (growth of 8.0 percent)
against Rs 1,698.1 billion (growth of 9.5 percent) during the same period last year. Growth in
money supply mainly contributed by Net Foreign Assets (NFA) of the banking system, which
increased by Rs 950.2 billion against an expansion of Rs 931.1 billion last year, reflecting an
improved balance of payment position. Whereas, Net Domestic Assets (NDA) of the banking
system observed an expansion of Rs 714.6 billion during the period under review compared to an
expansion of Rs 767.0 billion during same period last year. During the period 1st July-30th April,
FY2021, overall private sector credit witnessed an expansion of Rs 454.5 billion against Rs 318.5
billion last year. On a positive note, fixed investment loans increased significantly by Rs 140.4
billion during July-April, FY2021 against the borrowing of Rs 0.4 billion same period last year,
which augurs well for the industrial sector and overall economic growth in the coming years. The

10
government has borrowed Rs 675.9 billion for budgetary support during 1st July-30th April,
FY2021 compared to Rs 1,171.3 billion in the same period last year. Within budgetary support, the
government has borrowed Rs 1,840.6 billion from scheduled banks as compared to the borrowing
of Rs 1,813.4 billion in a comparable period last year. On the other hand, the government has
retired Rs 1,164.7 billion to SBP as compared to the retirement of Rs 642.2 billion during the
same period last year. This shows a continuation of government adherence to zero borrowing
from the central bank.
6. Capital Markets & Corporate Sector During FY2021, Global equity markets, which
plummeted in March 2020, rebounded when governments around the globe injected big stimulus
money into their economies. Pakistan Stock Exchange (PSX) also successfully powered through
the initial COVID-19 induced economic downturn and earned the title of being the ‘best Asian
stock market and fourth best-performing market across the world in 2020.’ During July-May
FY2021, the benchmark KSE-100 index improved from 34,889 points to 47,896 points, gaining
13,006 points in the said period. As of May 31, 2021, the total market capitalization of the
Pakistan Stock Exchange was Rs 8,267 billion. An increase of 26.6 percent was witnessed in
market capitalization, compared with the June 30, 2020 market capitalization of Rs 6,529 billion.
Though the third wave of COVID-19 dragged the KSE-100 index down in March and April of
FY2021, reforms introduced by the SECP and the government’s pro-growth policies are helping
the capital market to withstand the pressure. The distinguishing feature of this year is the
significant number of IPOs that took place. Despite the COVID-19 outbreak, Pakistan Stock
Exchange witnessed five IPOs between July 2020 and March 2021. These five are: The Organic
Meat Company, TPL Trakker, Agha Steel Industries, Engro Polymer & Chemicals Limited and
Panther Tyres Limited. During July-March FY2021, corporations raised Rs 96.9 billion by issuing
seventeen debt securities. While 93 previous corporate debt securities worth Rs 782.875 billion
remain outstanding.
7. Inflation The Consumer Price Index (CPI) inflation for the period July-May FY2021 was
recorded at 8.8 percent against 10.9 percent during the same period last year. The other
inflationary indicators like the Sensitive Price Indicator (SPI) was recorded at 13.5 percent against
14.0 percent last year. Wholesale Price Index (WPI) was recorded at 8.4 percent in July-May
FY2021 compared to 11.1 percent last year. During July-May FY2021, National CPI inflation for
FY2021 remained lower than same period last year. Administrative measures including a
crackdown on speculative elements and resumption of seasonal supplies of perishables helped to
minimize the inflationary pressures. Furthermore, tax relief measures in Budget FY2021 in
response to COVID-19 also provided relief in terms of stable prices of various goods. At the
beginning of FY2021, a major contribution to increase in inflation in both urban and rural baskets
came from food groups mainly due to the extended monsoon season. The government realizing
the significance of supply disruption started establishing Sahulat/Bachat Bazar in all parts of the
country. The rise in the prices of global agrarian products and other commodities especially oil
contributed to domestic inflation as well. As far as oil prices are concerned, the government did
not pass on the burden of price increase to the general public proportionately in order to maintain
price stability.
8. Trade and Payments Amidst the uncertain and precarious global economic environment,
where the global economy was lurching under the impact of the unprecedented COVID-19 shock,
Pakistan’s external sector has appeared as a key buffer for resilience. The comfortable external
balance position of Pakistan has been supported by surplus current account balance on the back
of robust flow of remittances and a sustained recovery in exports. Furthermore, improvements in
the services and primary income account also provided a cushion to turn the current account

11
deficit of $ 4.7 billion in FY2020 into a surplus of $ 773 million during July-April FY2021. The
inflow of workers’ remittances in Pakistan has been rising consistently since FY2018 and the
trend continued in FY2021 with a meritorious growth of 29.0 percent and reached $ 24.2 billion
during July-April FY2021. Export of goods grew by 6.5 percent during July-April FY2021 and
stood at $ 21 billion as compared to $ 19.7 billion in the same period last year. Import of goods
grew by 13.5 percent to $ 42.3 billion as compared to $ 37.3 billion last year. Consequently, the
trade deficit increased by 21.3 percent to $ 21.3 billion as compared to $ 17.6 billion last year.
Pakistan’s total liquid foreign exchange reserves increased to $ 22.7 billion by the end of April
2021, up by $ 3.8 billion, indicating a growth of 20.1 percent over the end-June 2020. On account
of increased foreign exchange reserves, supported by remittances, exports and financial support
from International Financial Institutions, the Pakistani Rupee started to appreciate. The
introduction of a market-based exchange rate regime also helped to stabilize the Rupee and the
exchange rate reached Rs 153.5 per $ by the end of April 2021, effectively appreciating by 9.5
percent over end-June 2020.
9. Public Debt Total public debt was recorded at Rs 38,006 billion at end March 2021. Domestic
debt was recorded at Rs 25,552 billion while external public debt was recorded at Rs 12,454
billion or $ 81.6 billion at end March 2021. Pakistan has been able to contain the growth in its
public debt portfolio despite a very challenging macroeconomic situation around the globe due to
the pandemic. In fact, Pakistan witnessed one of the smallest increases in its public debt. Global
public debt to GDP Ratio increased by 13 percentage points, from 84 percent in 2019 to 97
percent in 2020, whereas, Pakistan’s Debt-to-GDP ratio witnessed minimal increase of 1.7
percentage points and stood at 87.6 percent at end June 2020 compared with 85.9 percent at end
June 2019. The Debt-to-GDP ratio of Pakistan is expected to reduce and will remain below 84
percent at the end of current fiscal year.
Public debt portfolio witnessed various positive developments during ongoing fiscal year, some of
them are highlighted as follows:
• Over 80 percent of the net borrowing from domestic sources was through medium- to-long-term
domestic debt instruments; • In-line with the government’s commitment, no new borrowing was
made from State Bank of Pakistan (SBP). In fact, government repaid Rs 569 billion during the
ongoing fiscal year against its debt owed to SBP. The cumulative debt retirement against SBP debt
stood over Rs 1.1 trillion during last two fiscal years; • Refinancing risk of debt portfolio reduced
significantly during the tenure of the present government. Short-term debt as percentage of total
domestic debt has decreased to around 23 percent at end March 2021 compared with 54 percent at
end June 2018; • The Rs 25,000, Rs 15,000 and Rs 7,500 denominations prize bonds were withdrawn
from circulation in order to improve the documentation of the economy. The holders have been given
options to (i) convert to premium prize bonds; or (ii) replace them with eligible National Savings
Certificates; or (iii) encash at face value into their bank accounts; • Pakistan entered the international
capital market after a gap of over three years by successfully raising $ 2.5 billion through a
multi-tranche transaction of 5-, 10- and 30-year Eurobonds under its first-ever Global Medium Term
Note Programme; • Pakistan is availing the G-20 Debt Service Suspension Initiative (DSSI) for a
period of 20-months (May 2020 - December 2021) which will help to defer the debt servicing impact
to the tune of around $ 3.7 billion during this period.
Total interest servicing was recorded at Rs 2,104 billion during first nine months of current fiscal year
against its annual budgeted estimate of Rs 2,946 billion. Out of this total, domestic interest payments
were Rs 1,934 billion and constituted around 92 percent of total interest servicing during first nine
months of current fiscal year which is mainly attributable to higher volume of domestic debt in total

12
public debt portfolio. Pakistan’s strategy to reduce its debt burden to a sustainable level includes
commitment to run primary surpluses, maintain low and stable inflation, promote measures that
support higher long-term economic growth and follow an exchange rate regime based on economic
fundamentals. With narrower fiscal deficit, public debt is projected to enter a firm downward path
while government’s efforts to improve maturity structure will enhance public debt sustainability.
10. Education Present government is committed to achieve Goal 4 of SDGs i.e., “Quality Education”;
which stipulates equitable education, removal of discrimination, provision and up-gradation of
infrastructure, skill development for sustainable progress, universal literacy, numeracy and
enhancement of professional capacity of teachers. A Single National Curriculum (SNC) has been
designed with the vision of one system of education for all, in terms of curriculum, medium of
instruction and a common platform of assessment, so that all children have a fair and equal
opportunity to receive high quality education. The total number of enrolment during 2018-19 was
recorded at 52.5 million as compared to 51.0 million during 2017-18, which shows an increase of
2.9 percent. The enrolment is estimated to increase to 55.0 million during 2019-20. The number
of institutes (both public and private) reached to 273.4 thousand during 2018-19 as compared to
262.0 thousand during 2017-18. However, the number of institutes is estimated to increase to
279.4 thousand in 2019-20. The number of teachers during 2018-19 were 1.76 million as
compared to 1.77 million during the last year. The number of teachers is estimated to increase to
1.80 million during 2019-20. According to the PSLM, District Level Survey 2019-20, the literacy
rate of population (10 years and above) is stagnant at 60 percent in 2019-20 as compared to
2014-15. Province wise analysis suggests that Punjab has the highest literacy rate, with 64 percent
followed by Sindh with 58 percent, Khyber Pakhtunkhwa (Excluding Merged Areas) with 55
percent, Khyber Pakhtunkhwa (Including Merged Areas) with 53 percent and Balochistan with 46
percent. Public expenditures (federal & provincial governments) on education were estimated at I.
5 percent of GDP in 2019-20, as compared to 2.3 percent in 2018-19. The education- related
expenditures decreased by 29.6 percent i.e., from Rs 868.0 billion to Rs 611.0 billion due to
closure of educational institutes, amid country-wide lockdown and decrease in current
expenditures (other than salaries) due to COVID-19 pandemic. The COVID-19 pandemic has not
only created a health crisis in the country but also adversely affected other sectors including
education sector. In order to mitigate the learning losses of students during the closure of
educational institutes, the government has launched initiatives like Tele School and Radio School
to provide distance learning and addressed provision of education to the children of far flung and
remote areas during the pandemic.
11. Health and Nutrition The COVID-19 pandemic has tested the country’s health infrastructure
and identified the need for more investment in the health sector especially for diagnostic facilities,
disease surveillance, disease prevention and spread, training of health personnel and their
protection from the pandemic, vaccine development, up-grading health care infrastructure,
emergency rooms, intensive care units, isolation wards and public awareness. In order to make
substantial progress on Goal 3 of SDGs (Good Health and Wellbeing), the Government of
Pakistan has given priority to strengthen the health sector to further resolve and address the
outbreak of the COVID-19 pandemic. The health-related expenditure increased by 14.3 percent
from Rs 421.8 billion (1.1 percent of GDP) in 2018-19 to Rs 482.3 billion (1.2 percent of GDP) in
2019-20. In Pakistan, the first case of COVID-19 was confirmed on 26 February 2020, when the
first patient in Karachi tested positive. The first wave of COVID-19 claimed 6,795 lives, infected
332,186 and left behind 632 on ventilators. The government announced the second wave of
COVID-19 on 28 October 2020, when there was a sudden increase in active cases from 6,000 to
11,000 and 93 hospitalized patients were put on ventilators. The third wave of COVID-19 in

13
Pakistan started on 17 March 2021, when daily cases reached 3,000 with a positivity rate of 10
percent. Pakistan formally launched the coronavirus vaccination drive on 03 February 2021.
China has donated 1.5 million doses of the Sinopharm vaccine, which has an efficacy of 79 percent.
Till 2nd June, 2021, a total of 13.0 million doses of vaccine have been received by the Government
of Pakistan and 8.3 million doses have been administered as on 5th June, 2021. The government
is fully committed to increase the health coverage and provision of good nutrition to meet the
emerging demand and to develop the effective human capital.
12. Population, Labour Force and Employment According to the National Institute of
Population Studies (NIPS) estimated population of Pakistan is 215.25 million with a population
growth rate of 1.80 percent in 20201 and population density of 270 per Km2. Pakistan has an
extraordinary asset in the shape of youth bulge, which means that the largest segment of our
population consists of young people. The population falling in the age group of 15-59 years is 59
percent, whereas 27 percent is between 15-29 years. This youth bulge can translate into economic
gains only if the youth have skills consistent with the requirements of a modern economy. The
government has started different programmes for improving employment opportunities for youth
such as “Prime Minister’s Youth Entrepreneurship Scheme” and “Prime Minister’s Hunarmand
Programme-Skills for All” etc. According to the “Special Survey for Evaluating Socio-Economic
Impact of COVID-19 on Wellbeing of People” conducted by the Pakistan Bureau of Statistics,
population working were 55.74 million, prior to COVID-19. This number declined to 35.04 million
which indicates people either lost their jobs or were not able to work. The government announced
package for construction sector and provided industrial relief, etc. Thus opening of these sectors,
in which daily wagers were working along with fiscal stimulus and monetary measures, helped
economy to recover. Thus according to the survey in August-October FY2021, 52.56 million
resumed jobs.
13. Transport and Communication Due to COVID-19, the scheduled flight operations to most
parts of the country and the globe remained suspended. However, Pakistan International Airline
Corporation (PIAC) operated special flights to facilitate stranded Pakistanis abroad. Population
data reported in the chapter is based on Census 1998. Census Results 2017 have been released by
PBS. NIPS will provide projected data accordingly, with the consultation of PBS and M/o
Planning, Development & Special Initiatives. The revised Population data will be published in
Statistical Supplement PES 2020-21. Pakistan Railways is a major mode of transport in the public
sector, contributing to the country’s economic growth and providing national integration.
Pakistan Railways comprises a total of 466 locomotives (461 Diesel Engine and 05 Steam Engines)
for the 7,791 km route length. During July-February FY2021, gross earnings have been recorded
at Rs 30,966.11 million against Rs 36,916.85 million. Pakistan National Shipping Cooperation
Group has made significant progress in bulk and liquid cargo segments. Despite the pandemic,
the Group has managed to achieve a profit of Rs 1,235 million as against Rs 1,411 million in the
corresponding period last year. The turnover stands at Rs 9,633 million compared to Rs 9,621
million for the previous year’s corresponding period. Revenue of the tanker segment, including
foreign charters, grew by 7.12 percent from Rs 6,195 million to Rs 6,635 million. The increase in
revenues reflects the growth in the operational activity of the Group. There has been a consistent
growth in IT & IT-enabled services (ITeS) remittances over the last 5 years, with a compound
annual growth rate (CAGR) of 18.85 percent, the highest growth rate in comparison with all other
industries and the highest in the region. Micro enterprises, independent consultants and
freelancers have contributed an estimated $ 500 million in IT & ITeS exports. The annual
domestic revenue exceeds $ 1 billion. IT export remittances, including telecommunication,
computer and information services have surged to $ 1.298 billion at a growth rate of 41.39 percent

14
during July- February FY2021, in comparison to $ 918 million during the corresponding period of
FY2020. ITeS export remittances comprising of computer services and call center services have
surged to $ 1.113 billion at a growth of 41.65 percent during July-February FY2021 as compared to
$ 785.686 million during same period last year. The number of Pakistan Software Export Board
(PSEB) registered IT & ITeS companies as of 30th March 2021, is 3,013 compared to 2,484 as of
March 2020, showing a growth of 21 percent. FDI in telecom during July-February FY2021 was
$ 101.1 million. Telecom operators have invested an amount of $ 363.9 million during
July-February FY2021. The main driver behind this investment is the cellular mobile sector which
has invested $ 253.5 million during the period. The overall investment in the telecom sector
during the two quarters of FY2021 crossed $ 465.0 million. Cellular mobile subscribers (number
of active Sims) in Pakistan reached 182 million at the end of March 2021 compared to 167.3
million at the end of June 2020, showing a growth of 8.6 percent in nine months. Broadband
connections as of end March 2021, increased to 100 million registering 19.7 percent increase as
compared to FY2020. PEMRA has issued 258 Licenses for FM Radio and 4,173 Cable TV Licenses.
PEMRA has deposited over Rs 105.0 billion in national exchequer.
14. Energy Pakistan’s reliance on thermal which includes imported coal, local coal, RLNG and
natural gas has been decreasing over the last few years. Pakistan’s dependence on natural gas in
the overall energy mix is on the decline and the reduction of its share in the energy mix may be
attributed to declining natural gas reserves as well as to the introduction of LNG since 2015.
Regarding consumption pattern, there is no considerable change in the consumption pattern of
electricity. During July-April FY2021, the share of agriculture in electricity consumption is
consistent at 8.9 percent. However, the share of Industry in electricity consumption has increased
to 26.3 percent in July-March FY2021 as compared to 25.5 percent in the same period last year.
NEPRA has extended advice to the concerned entities, including Federal/ Provincial
Governments, on various power sector issues. A landmark decision was taken by the Detailed
Design and Implementation Plan of Competitive Trading Bilateral Contract Market (CTBCM) to
make the competitive wholesale electricity market operational by April 2022 and ushering a new
era of transparency, predictability and credibility whereby electricity shall be traded like any other
commodity. NEPRA also established Occupational Health, Safety & Environment (HSE)
Department to enhance the safe and smooth operations and well-being of licensee employees,
contractors and community as a whole. Crude oil’s local extraction and imports reached to 68.9
million barrels in July-March FY2021 from 58.6 million barrel in corresponding period last year,
while share of import in July-March FY2021 remained 48.2 million barrel as compared to 38.8
million barrel in last year same period. Similarly, in July-March FY2021, consumption of
petroleum products increased to 14.7 million tonnes from 12.5 million tonnes. LPG plays an
important role in the energy mix of Pakistan as it provides a cleaner alternative to biomass-based
sources, especially in locations where natural gas is not available. The total supply of LPG during
July-March, FY2021 was 927,683 metric tonnes. Currently, there are 11 LPG producers and 216
LPG marketing companies operating in the country having more than 7,000 authorized
distributors. During July-February FY2021, the average natural gas consumption was about 3,723
Million Cubic Feet per day (MMCFD) including 950 MMCFD volume of RLNG. During July-
February FY2021, the two gas utility companies (SNGPL & SSGCL) have laid a 143 Km gas
transmission network, 2,616 Km distribution and 886 Km services lines and connected 70
villages/towns to the gas network. Moreover, 304,573 additional gas connections including
303,243 Domestic, 1,020 Commercial and 310 Industrial were provided across the country.
15. Social Protection Social protection has a central role to play in addressing the social, economic
and health dimensions of the COVID-19 crisis. The Ehsaas Emergency Cash programme has

15
proven to be effective in mitigating the socio-economic consequences of COVID-19 pandemic. The
Government has disbursed Rs 179.8 billion as one-time emergency cash assistance to 14.8 million
families at risk of extreme poverty. Since the launch of Ehsaas, many transformative initiatives
and policy reforms have effectively been implemented nationwide. Some of the Ehsaas’ early wins
across various sectors include Ehsaas Kafaalat, Ehsaas Emergency Cash, Ehsaas Undergraduate
Scholarship, Ehsaas Nashonuma, Ehsaas Langars, Ehsaas Interest-Free Loans, Ehsaas Amdan
and several others. Under Ehsaas Kafaalat Programme, the government is providing cash
stipends of Rs 2,000 monthly. Number of Kafaalat beneficiaries has been increased from 4.6
million to 7 million. All payments are being made through the new biometric Ehsaas Digital
Payment System ensuring transparency. Under Ehsaas strategy, interest free loans are a major
component of the National Poverty Graduation Initiative. Since July 2019 to March 2021, a total
of 1.2 million loans (46 percent loans to women) have been disbursed amounting Rs 44.42 billion.
Overall, 1,100 loan centers/branches have been established in about 110 districts by 24 partner
organizations across the country. During July-March FY2021, a total of 490,368 interest free
loans (47 percent loans to women) amounting to Rs 17.50 billion have been disbursed to the
borrowers. Pakistan Poverty Alleviation Fund (PPAF) also helps in micro-credit, water, health,
education and livelihood. Since its inception in April 2000 till March 2021, PPAF has disbursed
an amount of approximately Rs 228 billion to its Partner Organizations (POs) in 144 districts
across the country. A total of 8.4 million microcredit loans have been disbursed with 60 percent
loans to women and 80 percent financing extended to rural areas. The overall disbursements for
core operations during July-March FY2021 amounted to Rs 2.64 billion. Pakistan Baitul Mal
(PBM) is providing financial assistance to the destitute, widows, orphans and other needy persons
at the district level. During July-March FY2021, PBM has disbursed an amount of Rs 3.0 billion
through its core projects. Workers Welfare Fund during July-March, FY2021 disbursed Rs 2.47
billion on 33,679 scholarship cases, while Rs 573.44 million have been utilized as marriage grants
@Rs 100,000 per worker benefitting 5,736 workers’ families. The WWF has also disbursed Rs
496.55 million as a death grant @Rs 500,000 per worker, covering 994 cases of mishaps all over
the country. EOBI provides monetary benefits to old age workers through various programmes
such as Old Age Pension, Invalidity Pension, Survivors Pension and Old Age Grant. During
July-March FY2021, an amount of Rs 34.06 billion has been utilized for 399,574 beneficiaries.
16. Climate Change The changes in climate had started around fifty years back due to rapid
industrialization with substantial geopolitical consequences. As things stand, we are at a
crossroads for a much warmer world. According to German Watch, Pakistan is among the top ten
countries most affected by climate change in the past 20 years. The reasons behind this include
the impact of back-to-back floods since 2010, the worst drought episode (19982002) as well as
more recent droughts in Tharparkar and Cholistan, the intense heat wave in Karachi (and
Southern Pakistan generally) in July 2015, severe windstorms in Islamabad in June 2016,
increased cyclonic activity and increased incidences of landslides and Glacial Lake Outburst
Floods (GLOFs) in the northern parts of the country. To revive the forest cover and wildlife
resources in Pakistan the government has launched the Ten Billion Tree Tsunami Programme.
The programme has achieved a plantation of 350 million plants in the first three quarters of
FY2021 and about 100,000 daily wagers have been employed till March 2021. Cumulatively, more
than 800 million plants have been regenerated / planted in the last two years with a target to
reach one billion by June 2021. To mitigate the negative impacts of the automobile sector
emissions on the environment and giving a boost to the economy, the Government has approved
its National Electric Vehicle Policy targeting a 30 percent shift to electric by 2030. (Excerpts
taken from Business Recorder, 2021)

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02 Salient features of Budget 2021-22
In an attempt to generate stimulus

and offer enough incentives that
would help it reach a growth target
of 4.8%, the federal government
unveiled its third budget on 11 June.
Here are the salient features:
• GDP growth target has been set at
4.8% • Total budget outlay set at
Rs8,487 billion • National PSDP
outlay set at Rs2,102 billion • Federal
PSDP outlay set at Rs900 billion for
FY22, up 43% year-on-year
compared to Rs630 billion in FY21 •
Large-scale manufacturing to grow by 6.0% • Debt
repayment to cost Rs3,060 billion • Government sets
NFC distribution target at Rs3,412 billion • FBR's tax
collection target set at Rs5.8 trillion for FY22
compared to PKR 4.7 trillion in FY21. • An amount of
Rs12 billion set aside for emergency agriculture
program to ensure food security • Total subsidy
expenditure for FY22 stands at Rs682 billion • No
new tax implied on salaried class • Minimum wage to
be increased to Rs20,000 • Interest-free loans upto
Rs500,000 to be provided to help alleviate poverty
concerns • Foreign auditors to be selected for E-audit
system • Karachi's transformation plan will be
allocated Rs98 billion from the PSDP • Reduction in
rate of capital gains tax on disposal of securities from
15% to 12.5% • Defence spending to be Rs1.37 trillion
in the upcoming year • Federal government
employees' salaries and pensions would be increased
by 10% • Federal excise duty proposed on internet
data usage at Rs5 per GB • Tax on the so-called ón’ money on vehicles, if sold without registration, is
to be retained • Reduction in tax liability by 25% for women entrepreneurs. • As per a brokerage
house, the budget announcement is positive for the following sectors: Flat Steels (cut in HRC duties),
Pharmaceuticals (cut in duties on import of APIs), IT (Zero Rating), Textiles/Consumers/Foods
(reduction in duties) and Refineries (exemption on tax on BMR). It was deemed neutral to positive for:
Power (allocation of subsidy towards PHPL and IPPs), Banks (removal of WHT for non-filers),
Cements and Rebar Steel (higher allocation for development expenditure) and Autos (reduction in
duties on car below 850CC). However, the an initial analysis suggested it is negative for telecom
operators (higher taxes).
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17
03 Good governance through sustained development
Good governance has been defined in a myriad way since it became an essential prerequisite for the
approval of aid from donor countries. Exceeding from the demand of seeing a democratic government
elected through ballots, the institutions like the World Bank and the UNDP desired to see developing
countries enable a political environment where power and authority were exercised in a pluralistic
manner, where the relationship between the ruler and the ruled was defined in terms of equality and
justice, where the resolution of conflicts was made through a nonpartisan process of accountability,
and where interests were articulated, and rights were exercised without fetters. So, governance meant
government plus something else, such as political and economic reforms for capacity enhancement. It
is unlikely for any country to progress and grow if its political leaders act arbitrarily and corruptly,
and exclude all interests other than their own. To many experts, a country fails to grow if it cannot use
its resources efficiently and indiscriminately. In a nutshell, for a country to progress and grow, its
governance principles should be aligned to specific benchmarks.
The concept of good governance has evolved over the years. In the first phase of good governance,
emphasis was laid on the role of the institution to practise check and balance on the power of various
organs of the state so that a stable, predictable, and non-arbitrary state is created to achieve economic
development and prosperity. The second phase relied on civic participation and social inclusion from
the so-called civil society. Since they operated “outside” politics, they could bypass the competitive
political system and bureaucratic hurdles to improve government effectiveness and develop a legal
framework for market-based development. Finally, in the third phase, new thinking about governance
emerged called political economy of governance. It viewed good governance from the lens of wealth
creation and its distribution to eliminate inequality that leaves a substantial segment of the
population deprived of the economic pie that only serves the top 10 or even lesser percentage of
people.
Does this discussion leave us with an assumption that development or economic growth is accessible
if specific parameters of good governance are achieved or practiced? Certainly not. In the recent past,
the PTI government and even earlier during the Musharraf regime and also for a brief period during
the last PML-N government, Pakistan even touched the growth prospects measured in Gross
Domestic Products to 7%. However, by the yardstick of the Human Development Index the people of
Pakistan were actually living a life unfettered from the chains of hunger, poverty, and
under-resourced health and education sectors. In fact, when Musharraf left and the PPP came to
power and subsequently other governments till PTI in 2018, they all went to the IMF to borrow
money to meet their expenditures. So, the growth in real terms was just an expression of development
in numbers. The money did come but was not invested in improving the quality of life of those who
constitute 70% of the rural class population.
Many indicators have since been developed to measure good governance. The World Bank indicators
have been one of them. However, according to experts, there is no one-size-fits-all meaning to good
governance. The only anchor that could tie the varying ideas associated with good governance is
sustainability. In this regard, the Chinese experiment has been of remarkable success. It built good
governance on the foundation of sustained economic development. Rather than reconstructing
institutions or attempting to meddle the system with technocratic measures, it focused on developing
the economy first. This long-term vision of change transformed the role of its citizens from being
patronage- or rent-seekers to the ones with rights, entitlement, and responsibilities.

18
Measuring governance has also been of interest to think-tanks in the private sector, such as the
Cambridge IFA. As a global think tank, the Cambridge IFA has been awarding Global Good
Governance (3G) Awards since 2016. Founded on the sidelines of the UN World Humanitarian
Summit held in Istanbul, it has been advancing the UNDP agenda to promote sustainability and good
governance. Assessment of good governance is carried out in three major streams: Government and
Politics, Corporate Sector and Social Sector and Philanthropy. The 3G award nominees are selected
through a rigorous process, and winners are selected based on the 3G scorecard developed by
Cambridge IFA, consisting of five pillars: Transparency, Social Responsibility, Sustainability, Impact,
and Innovation. This year in its virtual ceremony held in London, some of the companies that grabbed
3G awards were the Securities and Exchange Commission Philippines, the Saudi Electricity Company,
the Doha Bank, and the South African National Zakah Fund. This year, 60 awards were distributed
among 31 institutions.
No country can escape from the responsibility of providing a governing infrastructure that ensures
commitment to the constitution, adherence to the rule of law, enforcement of a transparent process of
accountability, and creation of implementable public policies. The pursuit of the Sustainable
Development Goals could be a good start towards the journey of good governance. (Published in The
Express Tribune, June 10th, 2021).
04 China Pakistan Economic Corridor (CPEC) — fallacies and realities
This article dispels following perceptual fallacies about this vital project of Sino-Pakistan national
importance. First, that the Belt and Road Initiative (BRI) with CPEC as its flagship project, is a tool of
Chinese neo-imperialism. That China is using BRI/CPEC for advancing its global power and influence.
True partially. No super power offers free lunches, but the Chinese mode generally and CPEC
particularly is not exploitative; it offers a win-win situation for participating nations and is extensively
sensitive to social development. BRI/CPEC is not about economy alone; it’s about geo-economics, and
establishing a parallel non-exploitative economic system… and that makes the West uncomfortable.
The 129 or so mainly under-developed and developing nations on board will benefit from the regional
development projects and enhanced connectivity under BRI. Most of these nations have no access to
otherwise affordable capital. CPEC in particular has a strong component of social development,
poverty alleviation and demographic uplift, unlike similar programmes under other international
donors. For full-scale socio-economic development, CPEC is Pakistan’s only choice, having tried
others. Chinese conditionalities are comparatively milder and mostly without political caveats.
Detractors refer to China using Gwadar as a strategic naval base in its ‘string of pearls strategy’, to
alter global/regional geo-strategic status-quo, through its rising influence. This — critics cite — is a
threat to global commerce passing through international sea lines of communications (SLOCs) closer
to Gwadar. However, to the contrary, Gwadar is not leased, sold and/or surrendered to China or its
companies. It firmly remains part of Pakistan, which has every right to develop it, as it pleases.
Gwadar’s comparison with the Hambantota Port financing model in Sri Lanka is also erroneous and
not applicable; because CPEC as a proof of concept (POC) pilot project, is pivotal to the success of the
more significant and global BRI.
Second, that CPEC lacks transparency. Not true, as all available information about the project is
open-sourced and available on the CPEC Authority website. Project modalities, like terms and
conditions for Chinese companies, investment options, availability of local partners/investors,
international financing and profit repatriation, etc are amply covered in each contract. If there are

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‘any’ supervisory lapses by the Pakistani interlocutors in individual contracts, CPEC and China cannot
be held responsible as a whole.
Third, that CPEC would overburden Pakistan’s likely balance of payments, turning it into a ‘debt trap’.
This is far from truth. One, the total committed amount under CPEC is over $50 billion in two broad
categories; $35 billion allocated for energy projects while $15 billion kept for infrastructure, Gwadar
development, industrial zones and mass-transit schemes. About 70% ($35 billion) of the original
outlay was to be provided by Pakistan over an extended timeframe of 14-15 years (2017-2030). This
makes the average annual investment under CPEC closer to around $3-4 billion or 6-7 % of Pakistan’s
annual investment budget. Export revenues (thanks to uninterrupted power supply as CPEC projects
have already added around 11,000 MW) were modelled to rise up to $40 billion by 2024, easily
absorbing this additional amount without much stress on the balance of payment.
Two, as per an IMF report (2017), the peak outflows (by 2024/25) on account of CPEC debt servicing,
profit and dividend repatriation and increased imports were not expected to go beyond $3.5-4 billion,
gradually declining thereafter. If our exports grow at least 10% annually (exports grew at 12% in 2017
and 14% for Q2 this year, thanks to decreased energy shortages), the potential earning (calculated at
$6-7 billion) would easily afford the peak outflows. Unforeseen circumstances like the corona
pandemic, has strained Pakistan’s capital availability but this is expected to be short-term and
transitory. Economy/exports are already showing signs of recovery.
Fourth, that the CPEC projects would only benefit Punjab. CPEC’s Punjab-centricity is negated as its
projects, in all core areas, are spread nationwide, as articulated in three earlier columns.
Fifth and more sinister is the ‘anti-China campaign’ mainly by the US/Western media/governments
and their local interlocutors in media and our ashhrafiyya (elite) in/out of power corridors. These
elements cite China’s ultimate economic domination of Pakistan given Pakistan’s fragile, highly
indebted economy, weak exports, dependency on foreign assistance and susceptibility to periodic
external payment crises.
For greater clarity, infrastructure projects are financed by grants and long-term concessional loans
with an average interest rate of 2% or so. Chinese state-owned companies — designated by Chinese
government — are financing projects through ‘project loans’ from government-owned banks on
concessional terms. And in several projects, Chinese and Pakistani companies are into joint ventures.
And Chinese investment benefits Pakistan also through technology transfer, job creation and value
addition etc.
Easing energy shortages is to reduce import of capital goods, leading to saving on import bill.
Reduced demand for imported fuel oil/diesel will ease-up POL imports. The above calculations do not
take into account the ‘transit fees’ of the Corridor or associated economic activity generated in the
CPEC command areas. These calculations also do not reflect the ‘second order bonus’, whereby
greener projects make our industries more competitive for import substitutes and new export
products. And sustained Chinese inflows are projecting Pakistan as an attractive investment
destination. The cumulative effect of all this is not only enabling Pakistan to repay its obligations
under CPEC; Pakistan shall have surplus capital for investment in more projects. This is hard-nosed
economics and not some gullible rosy picture-painting. So, the chance to break Pakistan’s begging
bowl is now or never. Chinese interlocutors are especially incensed by misrepresentation of facts by
many Pakistanis and the constant barrage of doubts being created in the Pakistani population — from
inter-marriages to economic enslavement etc. China is characterised as the erstwhile East India
Company and Pakistan its likely satellite. Chinese companies are also irked by Pakistan’s red tape,
inconsistency of power tariffs and slower dispute resolution etc.

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Sixth, that Pakistan has a risky security environment. Actually, Pakistan protects Chinese working on
CPEC projects through an integrated security system, incorporating local police (Punjab has raised
special CPEC police), paramilitary forces, intelligence apparatus and Pakistan Army. The army has
raised two ‘Security Divisions’ (a division roughly has 20,000 personnel) for K-P/Punjab and
Sindh/Balochistan respectively. There are over 80,000 Chinese nationals living in Pakistan including
around 25,000 deployed on CPEC projects. Attack on any Chinese anywhere for any reason is
exploited as attack on CPEC workforce. In the final verdict, Pakistan should stay the course and China
to maintain its amity through re-scheduling of loans on softer terms, being sensitive to
corona-induced damage to Pakistan’s economy. Expectations should be manageable and CPEC
benefits spread equally far and wide. If CPEC can boost Pakistan’s industrial productivity, exports,
and job creation, it should be a game-changer. It actually is. (Published in The Express Tribune, June
12th, 2021).
05 Civil services: a national security threat?
Of the many reasons why civil service, as it is, qualifies to be a national security threat, here are the
main three. Firstly, it has held siege to the entire national resources as being policy chieftains through
the instruments of rules and regulations and plans and policies for every sector of the state which may
be able to contribute something or anything to national prosperity. Every policy that is framed is
merely a brainchild of some stellar generalist civil servant lacking sound professional impeccability
requirements with results in marginal benefits to some vested groups disbranching the larger public
segment. The sectoral professionals cannot disagree with the civil servant as their captain and are
compelled to host the nonsense and even whimsical wills of the Saheb Bahadur in the policies and
plans for the large ‘public interest’. Professionals who dare disagree are sacked swiftly to keep up
décor and discipline. Thus, jacks of all trades and masters of none drive the state no matter it be a
drive in a blind alley or a cul-de-sac. The important thing is that Saheb Bahadur drives.
Secondly, due to status quo compulsions, the public-state animosity is a recurrent feature and has
become a tangible reality with the passage of time. Now, it is neither the public that owns the
government nor the government that owns the public and the result is everyone for and by himself.
This has created an outraging citizenry which so far recently could be silenced through colonial tools
of power and repressions but with time, having taken a great tide, this citizenry can no more be
effectively silenced by Saheb Bahadur. This has intensified the citizenry in finding state machinery
being irresponsive and irresponsible to their needs and demands. This can crack the society and the
state together as predicted in the US Global Trends 2040 report. What the entire civil service is doing
now is safeguarding this status quo in collusion with the elected junta against a common enemy which
is the citizenry of the state. This is when and how the savior becomes the terminator.
Thirdly, since the civil services will never compromise on anything that tends to break off the status
quo so it becomes inevitable to disallow any professionalism to grow up as this would both question
and challenge their justifiable existence. Any talent that comes from outside the vicious civil services
circle is deemed alien and is given a lethal antibiotic doze which is completely efficacious. The system
is so well controlled that professionalism in running the state affairs has become a persona non grata
and civil services has proved itself as the most immediate reason of excessive brain drain.
Now let’s add salt to the injury. Whenever attempted to reform our civil service, after every reform
effort, strangely it has worsened than improved. It is so because every reform effort has been done in
oblivion of the system diagnosis that makes up the sick structure of civil services. Also, all these
reforms were directly linked with being responsive to meeting the present day challenges without first

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deciphering what those challenges were and without any post reform framework of how the reforms
could complement those challenges. There has been no science but emotions behind these efforts and
emotions alone only end up in scripting great tragedies. The result thus far has been inappropriate
recommendations only enhancing the sickness of the colonial legacy. This calls and compels us to
suggest reforms in the ‘system’ rather in the ‘processes’. Nowhere on planet earth is it anymore seen
that a brain surgeon is flying an F-16 jet and a jet pilot operating a brain tumor. It is only our civil
service which is ‘capable’ of doing both, that is, crashing the plane and killing the patient.
Professionals and not generalists will be able to reclaim the lost serenity of the state institutions.
(Published in The Express Tribune, June 10th, 2021).
06 Political consensus for economic goals
As the budget session draws near there is a flood of articles on the economy in newspapers, the
subject is discussed at length on television and remains the main topic of webinars. There is nothing
unusual about it as individuals, various segments of society and power centres would be deeply
interested in the impact of the budget on their businesses, professions and quality of life. For the
ordinary citizen keeping the inflation low and not making their life more difficult that matters the
most. But in certain cases, external factors determine inflation in which the government has limited
control. For the finance minister, presenting a budget of a country whose economy has remained
mostly anaemic and where there are conflicting interests is no easy task. Besides, being under the IMF
programme, the government has to comply with their broad and specific parameters and of other
international donor agencies restricting the scope for manoeuver. The question that our leaders need
to ask is: how long are we going to remain jacketed by these external forces? Clearly, it is time that we
earnestly resolved as a nation to liberate ourselves from this heavy economic dependence on outside
sources. A dependency that dwarfs our national achievements and constrains our freedom of
policymaking. Even it undermines the strategic and political significance of our conventional and
nuclear capability. And above all, hurts the national ego and self-esteem. All the big talk of our leaders
sounds shallow when we have to stretch the nation’s hand to borrow year after year. It is not that it is
unusual for nations to borrow or seek assistance from the IMF for they are meant to assist developing
nations specifically those facing serious financial crunch. But not as a prolonged or frequent source of
call. At times one wonders given the scale and enormity of problems that have piled up over the years
whether PTI or any future government can solve them. Especially if our politics remains as
confrontational and polarised that building consensus in parliament on major national issues
becomes very difficult. Besides, there is the increasing liability of pensions and loans and the defence
budget in which there is hardly any flexibility unless the threat scenario changes on the eastern and
western borders. It is however encouraging that the present finance minister is planning towards
achieving self-reliance. Merely blaming the previous governments for their follies is neither a solution
of our financial challenges nor gives the country freedom of action or boosts its self-image in the
comity of nations.
Similarly, if the opposition fails to give viable alternatives for improving the economy and moving
toward self-reliance then its criticism of government economic policies has no value. In the past PPP,
PML-N and military-led governments have all been financially rescued by the IMF and their
performance generally remained at par or marginally better. So, the question is: what alternate course
of action are the opposition parties offering that is new and workable that the government should
seriously consider? The best course for the opposition would be to support the programmes or areas
that will boost the growth trajectory. Broadly these have been identified to include — textiles, tourism,

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information technology, power sector, agriculture, etc. Modernising and upgrading these sectors
would require introduction of new technologies and replacement of outdated plant and machinery.
This would require substantial capital and astute management but the returns would be rewarding
provided the transition is well planned and executed. It would have to be spread over a few years and
this is more the reason why there has to be bipartisan consensus on the economic programme.
Bangladesh focused primarily on improving the quality of its products thereby considerably
expanding its export base. The BD government has given about 20 subsidies to export oriented
industries in the form of tax exemption for five years so that its products become globally competitive.
A similar approach of assisting the export sector by our government would inject new vigour in these
industries. Even within our country, business enterprises that have been forward looking, technology
savvy and pursued correct management practices have become globally competitive. Our defense
industry has been able to export certain military products like JS-17 aircraft, small arms, military
vehicles and other products despite serious competition. Our civilian industry with the right products,
good management and supportive government policies can become internationally competitive.
Recently, Getz Pharma Pakistan made environmental history when its manufacturing facility won a
prestigious international award. Similarly, certain engineering and IT companies are successfully
competing and expanding their presence in the global market. All those companies that are keeping
pace with technological developments and adhere to international quality standards win in the short
and long term.
For Pakistan, the increasing income differences within the region can have serious geopolitical
implications. As with lower income Pakistan is finding it more difficult to balance its budget as
resources for defense expenditure and development have to be curtailed. Moreover, Balochistan,
Northern areas and the recently integrated FATA region has to be given priority. A strong democratic
culture would ensure fairer resource distribution within different parts of the country. Our past and
recent experience demonstrates that without a functional political framework and a general
consensus on broad economic issues it is not possible to improve the economy on a sustainable track.
Politicians are expected to abide by democratic norms in dealing with matters of the state and in
relation with each other. This will pull the nation out of many of its political and economic woes and
restore confidence in the democratic process. At present our democracy is fragile and that has serious
consequences for the economy as well. Personal attacks on the character of his rivals by the prime
minister and the response of the opposition leaders toward him has vitiated the political environment
and made it difficult for them to cooperate on major national issues. Not realising that governance is
directly related to civic peace, working relationship with the opposition and the capacity and
legitimacy of the government. (Published in The Express Tribune, June 9th, 2021).
07 Proposed peace plan for South Asia
The value of peace is invaluable and cannot be measured, sought through sacrifices of the generations,
and yet is not guaranteed. Ask the people of Palestine, Kashmir, Afghanistan, Yemen, Syria, Iraq,
Libya, and Rohingya Muslims in Myanmar. Peace cannot be achieved by becoming a nuclear state, by
reaching space, or by getting a resolution passed in the United Nations. However, peace can be
achieved through dispute resolution by means of diplomacy and deterrence. Let me remind you of the
impact of effective diplomacy in the words of Winston Churchill, “Diplomacy is an art of telling people
to go to hell in such a way that they ask for the direction.” Though this quote has been debated for its
veracity, but it makes a lot of sense. If policy defines ends, diplomacy finds ways, and strategy
achieves those ends utilizing the available means. In South Asian context, if cross-domain deterrence
is avoiding an all-out conventional war between the archrivals: India and Pakistan, then it is the job of

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diplomacy to make sure that this opportunity is converted into a peaceful resolution of long-standing
disputes including Jammu and Kashmir (J&K).
India is an arrogant neighbour, but we cannot change it. It is committing atrocities on the unarmed
people of Kashmir, but we cannot stop it by not talking to them. It has unleashed all components of
hybrid war on Pakistan as revealed by European Union DisInfoLab, but we cannot convince the
western world about India’s wrongdoings because it has better diplomatic relations in the power
corridors. Therefore, it is suggested to debate on the following 5-point Peace Plan to engage India,
and expose its hypocrisy, should it not respond to Pakistan’s peace overtures.
1) Resume bilateral relations to get relief for the oppressed people of Kashmir. Whenever there is a
breakup of diplomatic relationship between India and Pakistan, it is the people of Kashmir who
suffer the most. In the last two decades, attacks on India’s Parliament in 2001, or the Mumbai
Attacks of 2008, or the recent events of 2019, the people of Kashmir face the brunt at the hands of
nearly one million men crushing the just struggle of Kashmiris. Whereas, during the same period,
under Pervez Musharraf and Manmohan Singh, the people of Kashmir had relatively better times,
because the two governments were making efforts to work out a formula for peaceful resolution of
the dispute. Even if the efforts failed, the people of Kashmir were not suffering as much.
2) Initiate a Comprehensive Dialogue for Productive Engagement. The process has been in place
under Composite Dialogue since the mid-1980s, when SAARC came into existence but without
productive outcome. This time the proposal is to conclude the Agreements on one issue and then
move forward on the other.
3) Invite India to initiate measures for greater regional integration. As mentioned earlier, India is a
difficult neighbour and boasts its arrogance due to its phenomenal size and physical control of the
disputed areas. Therefore, it is suggested that India may be offered lucrative opportunities so that
it feels compelled to engage with Pakistan for its own benefits. For instance, building of an
East-West SAARC Highway to market its products in the region.
4) Persuade India to revoke Article 370 and 35A. India’s BJP government’s actions of August 5, 2019,
are deplorable, but it cannot be undone by breaking off our bilateral relations. It is necessary to
engage and expose India on every forum to persuade it to revoke the Constitutional Amendments.
5) Strive for ‘Formal Peace Agreements’ on all disputes including J&K, may be starting with
relatively doable ‘Sir Creek’ and ‘Siachen.’ Historically, there have been agreements on the basic
principles for the resolution of doables but unfortunately these were not formalized. Perhaps it is
time that the agenda items of disputes between India and Pakistan are reduced by dissolving the
disputes one by one so that time is ripe for the peaceful resolution of the J&K, for the satisfaction
of the people of Kashmir, and not the governments of India and Pakistan.
6) There may not be anything new or fancy in these proposals, but a beginning must be made. We
must realize that Afghanistan is heating up again and there is a greater probability of uncertainty
on our western borders once again. Therefore, it is necessary to not repeat the same mistakes of
getting engaged on both the fronts simultaneously, yet again.
The importance of peace between India and Pakistan is extremely critical for the people of Kashmir. If
only the firing along the Line of Control (LoC) is stopped, like it was done between 2003 to 2006,
hundreds of Kashmiri lives would be saved, and they may be able to resume a normal life without the
fear. (Daily Times, June 7, 2021)
08 The paradox of energy transition

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Ahead ofthe 26th UN Climate Change Conference of the Parties(COP 26) scheduled at the end of the
year in Glasgow, manycountries have been upping the ante on the ‘green agenda’ to deliver new
ambitious commitments. Pakistan has also expressed strong support for advancing renewable energy
and fast-tracking energy transition, which is certainly an admirable, and necessary, pathway. This
support could be tracked in multiple policies and political statements including the Nationally
Determined Contribution (NDCs), Net Metering Regulation 2015, National Energy Efficiency and
Conservation Act 2016,Pakistan 2025: One Nation, One Vision,National SDG 7 Framework, and most
notably the Alternative Renewable Energy Policy (AREP, 2019) which set a target of reaching 30
percent of non-hydro renewable energy by 2030. Let’s theorise compatibility of thesecommitments,
policies, visions and inter-linked broader political economic landscape.Evena cursory look at themost
recent policies and statementsalone indicates major misalignments.For instance, the National SDG
Framework targets to increase share of renewable energy to 25 percent in the total final energy
consumption.The AREP targets 30 percentof power generation capacity from non-hydro renewables
by 2030.Whereas the recently revised Indicative Generation Capacity Expansion Plan (IGCEP) for the
period 2021 to 2030 envisage the share of solar and wind at 10 percentin the overall energy mixby
2030. The stated differences in mandates, goals and targetshave created widespread confusion and
scepticism toward a uniform decarbonisation strategy and roadmap.
It is important to note here that the very idea of having aplanned power sector expansion trajectory
was to avoid misbalanced growth and misaligned systemic institutional logics.The plan itself states its
overall purpose to be “fulfillment of outlines, actions, and strategies as stipulated in the relevant
policies and decisions of Government of Pakistan”.To this note, IGCEP hence raises several questions,
notably its misalignment with ARE Policy, and its blatant disregard for the 30 percent non-hydro RE
target. What is difficult to comprehend here is not only the paradox of policy and planning, but also
the paradox of rationality. For the power sector of Pakistan, a long-standing objective has been
reducing reliance on imported fossil-fuels and improving energy security. And although Pakistan
always had abundant solar and wind energy resources yet till recently, competing counterclaims
associated with the economic and technical constraints ofthese technologies held back its growth.
However, withmajor technological breakthroughs, recently renewable energy technologies have
undergone a dramatic downward shift in terms of cost, reaching grid parity. The cheaper and widely
accessible solar and wind energy hence has the potential to bring down generation cost. Where
intermittency of these resources remains a key challenge, but in the specific case of government’s 30
percent VRE target, the recent World Bank commissioned studies have concluded that a large and
sustained expansion of solar PV and wind power, alongside hydropower and substantial investments
in the grid, are both achievable and desirable. And that a substantial and immediate scaling up of
solar and wind capacity could assure several advantages including lowering GHG emissions over the
long term and reducing externalities. With these established techno-economic environmental
efficiency gains, the only problem still not addressed is fragmented state oversight, planning and
coordination; absence of innovative organisation, business and finance models; as well as grid related
constraints-consequently making the renewable transition highly resistant despite promising
potential while the reliance on fossil-fuels continues unabated. The skepticism surrounding
renewables is another key impediment undermining the entire process.The real challenge therefore
remains- complementing policy tools with creating an environment for transition. If done so, this
could effectively unleash a renewable revolution in the country.
The window of opportunity to achieve the 1.5°C Paris Agreement goal is closing fast. We need to
timely head in the right direction. For Pakistan, renewable energy does not only offer an ‘irresistible
alternative’ for advancing indigenous sustainable energy but a ‘necessary prescription’ for addressing

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longstanding challenges in the power sector-a much overlooked discourse. The challenge of advancing
renewable energy,however,cannot be achieved by a single government, institution or sector-rather
will require consolidated coordination and changes at every level of the energy value chain. Relevant
actors and stakeholders, legal and political regulations must be organised to successfully leverage the
underlying transformational forces substantiating the transition. A systemic approach to solving
fundamental barriers and capturing opportunities is therefore imperative to foster the desired
transformation.However, as a starting step, the government needs to face the reality and match its
grand plan’s words with more action through aligned institutional logics. (Daily Times, June 7, 2021)
09 Indian nuclear proliferation
In a period of less than one month (May 6, 2021 to June 4, 2021) there have been two major cases of
Uranium theft in India. In the first case, Indian police arrested two men in western Maharashtra State
with over seven kilogrammes of natural uranium. These two Indian nationals were “illegally
possessing” the highly radioactive Uranium. In the second case 6.4 kilogrammes of uranium was
seized from the possession of seven persons in the eastern Indian State of Jharkhand in Bokaro
district on June 4, 2021. These two incidents are only recent in the history of Indian uranium theft
cases. These uranium theft cases have exposed the Indian State control over the highly sensitive
radioactive and sensitive material. The founding institute of the Indian nuclear energy programme,
Bhabha Atomic Research Centre (BARC) of India has also confirmed that seized uranium from these
two theft cases is ‘highly radioactive and pure’. In the history of Indian nuclear programme, there
have been hundreds of such incidents both at individual and the collective theft and smuggling cases
which questioned the very security and control of radioactive material by the State. The nuclear
experts believe that such incidents are very serious from the perspective of nuclear terrorism.
These nuclear smugglers may be the people of Hindu terrorist gangs: Vishva Hindu Parishad (VHP)
and Bajrang Dal which have already declared as terrorist organisations by Central Intelligence Agency
of the United States in 2018. These are two sub-organizations of Rashtriya Swayamsevak Sangh (RSS)
the founding organization of ruling BJP. Nuclear experts believe that these terrorist organizations can
detonate radioactive material by combining it with any conventional weapon, which called “dirty
bomb”. In a way, if not prevented, such cases of the theft of radioactive material may lead towards
nuclear terrorism in India or its neighbourhood. Indeed, tracing the history of Indian nuclear
programme, there have been continuous incidents of the theft of radioactive material. So far over 153
such cases have taken place ever since 1980s.
Besides, there are dozens of cases of the uranium theft which were not reported in the press. Owing to
the continuous leakage of information, incidents of stealing sensitive nuclear material, seizing of
depleted Uranium and hundreds of cases of nuclear proliferation, the nuclear experts believe that
Indian nuclear program has become the most hazardous for the mankind or at least for the people of
South Asia. The outcome of the investigations of all these thefts and proliferations is still unknown. In
2016, there was a seizure of 8.861 Kilograms of Depleted Uranium by police in India’s Economic
capital, Mumbai, which cost approximately 24 crore rupees (Indian rupees). The Indian police
arrested two people, who possessed this Depleted Uranium. One of them, Mr Prajapati has been
named as Director of an unlisted company that deals with manufacturing of metals, chemicals and
related products. The most hazardous aspect of this seizure was that it contained 0.3 % Fissile Isotope
U-235 which could be used both for military and civilian purposes as reported by BARC. The worrying
aspect was that this was sourced from outside India which means that these smuggling and theft cases

26
of radioactive material are linked with international gangs through Indian Diaspora. The Indian track
record further revealed that in June 2009, an Indian scientist, Lokanathan Mahalingam, who was
working at “Kaiga Atomic Power Station” was mysteriously found dead along the bank of the Kali
River near Nisarga Guest House of the Nuclear Power Corporation Ltd in Mallapur Township. Later
investigations revealed that, he was involved in training apprentices of the actual reactor and was in
possession of the “highly sensitive information and might be doubted for Indian nuke proliferation”.
Earlier, Mr. Anil Kumar Tiwari, Director of the Uttaranchal Space Application Centre, was killed in
the similar circumstances in November, 2006. India otherwise has poor record of the chemical and
nuclear safety.
A lengthy study regarding the safety of Indian Atomic Energy Regulatory Board (AERB), revealed
over 135 “extremely serious safety issues warranting urgent corrective measures in the nuclear
installations like Bhabha Atomic Research Centre, the Indira Gandhi Centre for Atomic Research
(IGCAR), Nuclear Power Corporation of India Limited, Uranium Corporation of India Limited, Indian
Rare Earths Limited, Nuclear Fuel Complex (NFC) and the Heavy Water Board”. The 40 MW Cirus,
has also suffered the radiation leakage with the Candu reactors suffering from massive leakage of
heavy water and the “Fast Breeder Test Reactor” of 40 MW at Indira Gandhi Centre for Atomic
Research, Kalpakkam, built with French assistance, was rated `unsafe’, and discarded”. From 1986 to
1991, the inlets of the Madras Atomic Power Station and its reactors got cracked and it remained shut
down because of the leakage of tons of heavy water. These incidents of theft and smuggling of highly
radioactive material may lead towards nuclear terrorism in India. In fact, India is a country with
worst track record of nuclear proliferation and theft cases of radioactive material in the world. Its
nuclear programme is highly unsafe and most dangerous. Whereas, some analysts believe that RSS is
collaborating with Indian nuclear scientists in this proliferation of nuclear technology and nuclear
material through underworld organizations for some major game plan. Others are of the opinion that
it is because of poor security measures of Indian nuclear programme and radioactive material which
may lead towards nuclear terrorism. In both cases, IAEA, UNO and major powers especially the
United States must take a serious note of sequential incidents of nuclear proliferation and theft of
highly radioactive material. (Pakistan Observer, June 10th, 2021)
10 Pakistan's digital transformation
Precise targets and long-term vision: The scope of information technology or digitisation
continues to be discussed in a rather limited manner in mainstream discourse. Reducing it to apps,
online portals, start-ups or software houses is a costly injustice. The absence of a broad,
comprehensive definition has prevented the development of an overarching, long-term vision for
sustainable change. The parochial view has instead allowed policymakers to pat themselves on the
back for small, isolated projects and give an illusive impression of real progress. For example, in the
past several years, flashy schemes involving distribution of laptops in colleges or grants to start-ups
have popped up in various parts of the country. In the moment, they are deemed praiseworthy; it’s
understandable why that’s the case though — given the sheer dearth of resources, any small initiative
that solves a problem temporarily for a few people is a welcome ‘change’. However, we now have
evidence that such disparate schemes do not contribute to any meaningful, sustainable change.
Distribution of grants and creation of fancy incubation spaces (by a debt-ridden government) for
entrepreneurs won’t help grow the start-up ecosystem unless it is accompanied by bold reforms by the
State Bank, the Securities & Exchange Commission of Pakistan and the Federal Board of Revenue.
Investors must be able to repatriate their funds. Entrepreneurs should neither have to spend three

27
months setting up a company and getting it registered, nor an additional few months trying to open a
corporate bank account and setting up payroll. The distribution of laptops and internet dongles to
students, while noble, does not solve the core problem around access. Making access to the internet
(both devices and data) more affordable can have a multiplier effect on connectivity, which has been
globally proven to be the single biggest democratising force. Therefore, instead of implementing
short-lived plans that momentarily check off buzzwords associated with information technology and
make for splashy headlines, we need to decide where we want to see ourselves a decade down the line
and then define precise targets that will help us reach that dream in stages. The process begins with
expanding the scope of IT and this is an exercise we conducted in the early stages of the Digital
Pakistan initiative. Broadly speaking, five streams need to be running in parallel and complementing
each other:
1. access and connectivity,
2. digital infrastructure (which is the most underrated),
3. e-governance,
4. digital skills and literacy,
5. and innovation and entrepreneurship.
We need crystal-clear short-, medium- and long-term key performance indicators for each stream and,
most importantly, we need to ensure that the relevant stakeholders take ownership so that they can be
held accountable against those goals.
Clear ownership and accountability: Both intuitively and officially on paper, it is very clear who
has the capacity for and the responsibility to lead the charge of delivering a healthy digital ecosystem:
the Ministry of Information Technology and Telecommunications (MoITT). Currently, however, this
easily discernible ownership has become needlessly murky in two aspects. The first aspect is that
there are parallel structures in the form of divisions or advisers that sit outside of the MoITT. The
government can bring in the most competent advisers and task forces in the world but they simply
won’t be able to deliver if their vision is not backed by the relevant bureaucratic machinery and
meaningful legal authority. Any new policy or reform is implemented by the government through its
Rules of Business. The entity that has the ability to leverage these rules is the relevant ministry and
there are no two ways about it. The second aspect is that there are a variety of sub-bodies under the
MoITT or provincial governments that are working in silos.
1) There are bodies like the National Information Technology Board, Ignite and Universal Service
Fund but between severe resource constraints, delayed decision-making and, in some cases, lack
of leadership, they continue to be hamstrung.
2) The existence of the KP Information Technology Board and Punjab Information Technology
Board (and the lack of equivalent bodies in other federating units) is confusing because they seem
to be duplicating some of the work that also seems to be happening at the federal level.
3) The role of the Pakistan Telecommunication Authority as a regulator is crucial but it needs to
have the ability to operate independently with a clear vision on how to reform the sector.
Strong digital Identity and Infrastructure A critical piece of any type of digital transformation
is digital identity, which is why it’s unsettling that our mainstream discourse and understanding of
the subject hardly ever brings up Nadra. Success in bringing about reform in any sector depends a lot
on your ability to leverage digital identity. This is true for land, education, health, tax — you name it.
Are you giving out benefits to the right people? Are you vaccinating the right people? Are you

28
collecting tax from the right people? The list goes on and on. While it appears simple to talk about
leveraging Nadra, it’s important to understand exactly what digital infrastructure is. After evaluating
case studies from around the world, we believed that in Pakistan we needed to invest in five
interconnected areas that can drive true digital transformation:
1) Digital identity: A universal biometric digital identity, in line with inter-governmental
standards.
2) Digital data: A digital repository of personal data and records for every citizen and business,
including domicile, property, employment, education, health, taxes, etc.
3) Digital signatures: Digital signatures, like wet signatures, that allow digital signoff on
documents. The citizen or business is in control of who can access their personal data.
4) Digital payments: A real time, low-cost digital payments system that facilitates faster, cheaper
and easier commerce between citizens, businesses, and the government.
5) Digital services: Infrastructure that allows each citizen and business to approve sharing their
data with government and private-sector systems, to receive a variety of personalised,
seamless services (eg grants, loans, insurance, taxes, voting etc.)
In particular, the digital services sector offers unique and untapped potential that can help Pakistan
accelerate and leapfrog past other countries to become a global leader in digital government and
digital citizenship. With this digital infrastructure in place, developers, start-ups, businesses and
government departments can innovate on unique use cases to make citizens’ lives easier. So the
bottom line is that unless we have an independent Nadra with a visionary leader who understands
exactly how important digital identity is for unlocking nationwide cross-sector reform, we will
continue being incremental in our approach.
Right people for the right role We need the right people for the right job not just at Nadra but
any institution that’s meant to play a crucial role in our digital journey. We need people who are doers
and want to get stuff done — people who don’t bring politics into delivery and don’t chase clout. It’s
unfair and unrealistic to expect any government body, new or old, to deliver without the right
resources. We have seen time and again across various sectors of government that it’s next to
impossible to bring on board or, at least sustain, the right people: the long-winded and archaic
processes and absurd caps on compensation ensure that those relationships never work out. It is
critical to understand that the wrong person leading an organisation with money at their disposal is
more dangerous than not having a leader. We need to champion both meritocracy and
open-mindedness in our approach to human resourcing to make a real dent in any sector.
Information technology is no exception. In fact, considering that it’s a particularly specialised field
with constant innovation across the globe, excellent human resource is perhaps all the more
important in this industry.
Conclusion Set a clear vision, break it down into bite-sized goals, assign clear owners to those goals,
give them the authority and space to execute those goals (without jumping to premature action based
on unverified feedback) and then performance-manage them based on outcomes. It’s not rocket
science but it’s critical to get in place if we want to see sustained performance and results. (Published
in Dawn, June 12th, 2021)

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04 China Pakistan Economic Corridor (CPEC) — fallacies and realities

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05 Civil services: a national security threat?

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06 Political consensus for economic goals

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07 Proposed peace plan for South Asia

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08 The paradox of energy transition

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09 Indian nuclear proliferation

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10 Pakistan's digital transformation

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