Firewall Blocks govt’s: A $1 Trillion Vision at Risk
ISLAMABAD: Pakistan has recently developed a new five-year economic plan aimed at expanding the economy to a target size of $1 trillion. This decision comes after dissatisfaction with Stefan Dercon’s previous strategy. It is important to note that the recently implemented social media firewall may prevent us from attaining several key objectives outlined in the plan.
5Es Plan Targets Literacy and Poverty Amid Dual Economic Strategies
The plan seeks to elevate the current low literacy rate to 70% and achieve a 13% reduction in poverty incidence over the next five years. The Ministry of Planning formulated this document, which Prime Minister Shehbaz Sharif is set to officially present. Known as the 5Es National Economic Transformation Plan (2024-29), the plan responds to the lack of enthusiasm for UK-based professor Stefan Dercon’s earlier “home-grown” economic plan. Despite its shortcomings, the Prime Minister’s office is working to launch both plans concurrently, as they devoted significant time and resources to advancing Dercon’s proposal.
Economic Ambitions Hindered by IT Firewall and Slow Growth Projections
PM Sharif had engaged a UK-based economist to prepare the economic plan. The Pakistan Muslim League-Nawaz (PML-N) government has invested Rs39 billion to erect a social media firewall aimed at minimizing the impact of anti-government propaganda. However, this measure has slowed the nation’s progress in information technology. Until this firewall is removed, achieving some of the critical goals will remain difficult. The implementation of the 5Es framework aims to position Pakistan as a $1 trillion economy by 2035. Under a “business as usual” scenario, the economy is projected to remain below $500 billion over the next decade. The plan targets a compound annual growth rate (CAGR) of 9.8% over five years to reach the $1 trillion milestone by 2035.
Planning Minister Highlights Dual Strategies for Pakistan’s Future
In the next 23 years, two nations will celebrate their 100th anniversary. India is certain about its path forward, but do we know where Pakistan will be in 2047? said Ahsan Iqbal, the Federal Minister for Planning, during an interview with the Express Tribune. In response to a question, Iqbal clarified that the 5Es National Economic Transformation Plan serves as the government’s strategic document, while Stefan Dercon’s plan acts as a fiscal strategy. He suggested that both the strategic plan and the fiscal strategy could be implemented simultaneously.
Ambitious Goals for Pakistan’s IT and Digital Economy
The National Economic Transformation Plan is setting some ambitious goals for the future of Pakistan’s IT and freelancing sectors. They aim to boost exports in these areas by $5 billion by 2029, which is challenging given the current IT policies. Overall, the country is targeting a total of $60 billion in exports over the next five years. To achieve this, the plan emphasizes the need for a more open digital environment—essentially a VPN-free and unrestricted social media landscape—coupled with a transition from a security-focused mindset to a more democratic society based on the rule of law.
Under the “E-Pakistan” initiative, the plan aims to produce 75,000 IT graduates every year, increase the number of cell phone users to 192 million, and boost broadband subscriptions to 135 million. They also want to see the creation of over 250 universities recognized for higher education, a significant 178% rise in IT exports, and the establishment of more than 100 software technology parks. A standout goal is to have at least one unicorn company, valued at $1 billion, emerge from Pakistan. Currently, no company in the country reaches that figure in export earnings; the highest was under $550 million in 2023, coming from the textile sector.
Aiming for $5B IT Exports, Unicorn Companies, and Digital Expansion by 2029
Commenting on the situation, Daniel Castro, who’s the Vice President of the Information Technology and Innovation Foundation in the U.S., pointed out how most leading digital economies are focused on improving their digital infrastructure and connectivity. He noted it’s strange to see a digital economy hindered by internet shutdowns, which not only disrupt services but also come with hefty economic costs. By 2029, they want to have 100 million next-gen mobile subscribers, with 10% of those using 5G technology.
The overarching goal of the plan is non-inflationary, sustainable growth and long-term national prosperity. The plan focuses on exports, a knowledge-based tech economy, environmental and climate change initiatives, energy and infrastructure development, and social empowerment.
The plan aims to achieve the following goals for Pakistan
- Cut projected greenhouse gas emissions by 50% and increase renewable energy share to 10%.
- Reduce poverty incidence by 13% and position Pakistan as the world’s 10th largest economy by 2047.
- Address challenges such as stagnant growth, declining productivity, and technological lag.
- Implement the strategy through the 13th Five-Year Plan as a unified guideline for all ministries and provinces.
- Enhance the energy sector by increasing renewable energy, reducing subsidies, and eliminating circular debt.
- Improve railway transport shares (passenger from 5% to 15% and freight from 8% to 25%) through the $7 billion Mainline-I project.
- Create 1.5 million jobs annually and increase universal healthcare coverage by 12%.
- Target primary education completion at 28% and secondary education at 43%, with a literacy rate increase of 10% to reach 70% in five years.
Conclusion
In conclusion, the 5Es National Economic Transformation Plan presents a bold vision for Pakistan’s future, targeting economic growth, IT expansion, poverty reduction, and sustainable development. However, achieving these ambitious goals will require significant policy shifts, such as removing barriers like the social media firewall, fostering a more open digital environment, and addressing technological and infrastructural challenges. With effective implementation and coordination of strategies, Pakistan can pave the way for a stronger, more inclusive, and resilient economy by 2047. Firewall Blocks govt’s: A $1 Trillion Vision at Risk.