Key takeaways
- The Geneva conference pledged US$9.7 billion after the 2022 floods.
- The UAE rolled over US$2 billion and added US$1 billion.
- Aid buys liquidity; it does not fix macroeconomic or productivity weaknesses.
- STEM education, farm modernisation and Industry 4.0 standards are priorities.
- Exports and FDI are needed to close the saving-investment and trade gaps.
In this Business Recorder column (January 2023), written as Pakistan sought financing after the 2022 floods, Dr. Ghulam Mohey-ud-din argues that aid pledges should be treated as a bridge to reform, not as a solution.
The argument
The Geneva conference produced US$9.7 billion in pledges, and the UAE rolled over US$2 billion in loans and added US$1 billion more. These commitments eased the immediate liquidity crisis. They did nothing, the column notes, to change the structural weaknesses that keep bringing Pakistan to the edge of default.
The author sets out a reform agenda in six areas. Macroeconomic stability comes first: consistent monetary, fiscal and exchange-rate policy, backed by political continuity. Human capital comes next, with education moving from basic literacy towards science, technology, engineering, mathematics and artificial intelligence, so that the youth bulge becomes productive. Agriculture needs mechanisation, better seed, water conservation and a shift to higher-value crops.
Manufacturing has to meet Industry 4.0 standards to compete with Bangladesh and Vietnam, which requires solving energy shortages, infrastructure gaps and access to finance. Infrastructure spending should be spatially balanced and paired with social protection for vulnerable households. Finally, exports and foreign direct investment are needed to close the saving-investment and trade gaps and to bring in technology.
What needs to change
- Stable, coordinated macroeconomic and competition policy.
- STEM-focused education reform, including ICT and artificial intelligence.
- Agricultural modernisation and crop diversification.
- An industrial policy aligned with Industry 4.0.
- Balanced infrastructure with targeted safety nets, and an export and FDI drive.