So much so that IMF Christine Lagarde on a day's visit to Islamabad (Oct 24) noted that with a more resilient economy now, Pakistan can embark on the next generation of reforms to generate higher and more inclusive growth and 'tap into the dynamism of emerging economies'.

More comfort to Pakistan came around the same time from the World Bank's Doing Business 2017 Report which included it among the 'ten top improvers' with reforms related to Getting Credit, Registering Property and Trading Across Borders. Lahore's digitisation of ownership and land records was cited for improving the quality of land administration.

Pakistan, however, is far down the global rankings for Doing Business at 144, well behind India's 130 - which itself rose only marginally over previous year - but the World Bank has taken note of ongoing processes related to India's 'ambitious reform path' by a Government elected in 2014 on a platform of increasing job creation.

The Modi Government on a fast-paced reform path has employed the Doing Business indicators to monitor improvements in India’s business climate. While the Doing Business report has served as an effective tool to design and implement business regulatory reforms, the Bank says, data thrown up have led to a clear realization that India is in need of 'transformative reforms.”

There is clear disappointment that the Bank's latest Report does not take note of key reforms such as the enactment of GST (but which has still to go through a tortuous process to become operational) and accordingly raised its ranking further. The Bank does take note of improvements like significant reductions in the time and cost to provide electricity connections to businesses.

Also, India has made paying taxes easier by introducing an electronic system for paying employee state insurance contributions.

How does India fare in Doing Business in relation to BRICS and SAARC? Russia tops BRICS at 40 followed by South Africa (74), China (78), Brazil (123) and India (130). In SAARC, India takes the fourth place - though not strictly comparable with smaller economies like Bhutan, Nepal and Sri Lanka above it and followed by Maldives, Pakistan (144)and Bangladesh (176).

In South Asia region, the Bank report said, countries continued to implement business reforms in areas including cross-border trade and paying taxes made easier by introducing an electronic system . Now, a medium-sized company in India only has to make 25 tax payments, compared with 33 payments earlier. Additionally, India made enforcing contracts easier by creating dedicated divisions to resolve commercial cases.

Elaborating on Pakistan economy, IMF strikes a confident note that three years after the 2013 crisis, the country has placed itself on a stronger footing with considerable improvement in public finance, helped no doubt as in India's case with the low oil prices, and a relatively lower import requirement, which helped also to rebuild external buffers.

According to the Fund, Pakistan's economy is estimated to have grown 4.7 per cent in fiscal year ending June 2016 and growth in 2017 is projected at 5 per cent. In growth-supportive policies, Pakistan's power sector reforms has been appraised by IMF as significant inasmuch as, though not everything has been resolved, disruptive power outages have come down for industries and urban consumers.

Reduction of subsidies, which proved costly and inefficient and benefitted the more affluent, and decrease in power sector arrears have been listed as major gains. Pakistan also improved its revenue collections, by closing tax loopholes and base widening, equivalent to 2.5 per cent of GDP over the last three years, according to IMF.

Despite the significant fiscal consolidation achieved, public debt remains high, at about 19 trillion rupees, or 65 percent of GDP. Debt servicing, at current levels, by way of interest is larger than Pakistan’s entire development budget. Pakistan today collects little more than half of what could be taxable income. As in India, the tax base has to be broadened.

Pakistan with its 190 millions still faces enormous problems with more than two million young people entering the job market in this country and posing challenges in job creation at current levels of growth while the global economy itself on an extended slowdown, could be of little help in generating demand for its goods. In myriad social problems, increasing access to education is crucial, especially youth comprising about 60 per cent of Pakistan’s population.

In its study of select issues of Pakistan economy issues, IMF draws the conclusion that simplifying procedures to open new businesses, enforcing contracts and securing tax revenues could go a long way in promoting growth. At the same time, the energy sector reform needs to be completed. Monetary policy has to be prudent in ensuring low inflation and macro-economic stability.

Restructuring and attracting private sector participation in public enterprises has been urged to ensure their financial viability and reduce costs. The path to reform can be opened by promoting private investment, strengthening exports and raising productivity. Private investment in Pakistan today accounts for only 10 percent of the economy. In emerging markets however, the average is about 18 percent. Pakistan’s exports are about 10 percent of GDP; emerging markets’ exports are nearly four times as high.

IMF also points out that Pakistan can do better with higher public investment in infrastructure. Here, Pakistan is on strong ground with its cosy relationship with China, both being 'all weather allies'. Continuing support for projects under the China-Pakistan Economic Corridor with a China loan of over 40 billion dollars should promote growth and job creation besides facilitating regional integration. (IPA Service)