# *Detailed SUMMARY of the article "Dashed hopes" by Rashid Amjad, Published in Dawn on June 15th, 2025:* The article examines Pakistan's economic paradox where *macroeconomic indicators* appear stable while the *real economy* remains in a *deep slump*. According to the *Pakistan Economic Survey 2024-25*, the economy faces a *deep downturn* due to the *collapse of the crop sector* and *drastic decline in rural incomes*, affecting nearly *60% of the population* living in rural areas where *extreme poverty* is concentrated. The *severe decline in rural incomes* and limited success in *increasing exports* have led to *poor growth in manufacturing*, while the *services sector* (comprising nearly *60% of GDP*) has slowed down. The resulting *overall economic growth* is dismal at around *2.5%*, far below the required minimum of *6.5%* needed to absorb the *increase in labour force* and reduce *high poverty levels*, which according to a recent *World Bank report* have risen dramatically *post-Covid* to near *50%*. Despite this, the economy has *stabilized* with no *threat of default* given current *reserves*, a *stable exchange rate*, a *current account surplus* (thanks to *surge in remittances*), and *inflation at an all-time low* (expected to hover around *5-6%*). The government can take credit for this stabilization, recognized by the *IMF* and *rating agencies*. The author argues that *poor sequencing* of stabilization measures and *economic reforms* by policymakers are chiefly to blame for the economic contraction. A prime example is the *agricultural sector*, where the government's *cold-blooded removal* of *wheat support price* shows *anti-rural, pro-urban bias*, leaving farmers to suffer *huge losses* at the hands of *middlemen* without ensuring development of an *alternative market*. The article critiques *Finance Minister Muhammad Aurangzeb's* budget speech promise to *change the DNA of the economy* from its current *inefficient uncompetitive path* to one of *high productivity* and *sustained economic growth*. However, the author expresses disappointment with the announced reforms, describing them as *worn-out, positive steps* that have been *repeatedly tried before with little success*. These include a *tariff reform package* (in works since *1988*) with a *maximum upper limit* on *import duties of 15%* in five years and *four slabs*, but significantly no mention of reducing *import duties* on products of *most inefficient industries* (like *autos*) to improve competitiveness, demonstrating reluctance to take on *entrenched business interests*. The *privatization* of *state-owned enterprises* like *PIA* and *power distribution companies* was promised again. Great faith was placed in the *digital economy* and increasing its *export earnings* with *ambitious targets*, though *concrete measures* were difficult to discern. *Relief* was given under *strong pressure* to the *real estate sector* and *traders*, but hardly any to those who deserve it most — the *working poor*. *Technology and data* were promoted to bring more *tax evaders* into the *tax net*, and *agriculture income tax* was left to the *provinces*. Key issues related to *investment in people* (*health, education, social protection*) were mentioned, but the fact that their *already meagre share* in the *federal development programme* is being cut down (which has fallen to its *lowest level* in living memory to around *1% of GDP*) was not addressed. The author concludes with disappointment that this was envisaged as a *reform package* to *change Pakistan's DNA*. # *Easy/Short SUMMARY*: Pakistan's economy shows a paradox: *macroeconomic stability* but *real economy* in *deep slump*. *Economic growth* is only *2.5%* (need *6.5%*) due to *crop sector collapse* and *rural income decline* affecting *60%* of population. *Poverty* has risen to near *50%* *post-Covid*. While *inflation* is low (*5-6%*) and *exchange rate* stable, *Finance Minister Aurangzeb's* budget promised to *change economic DNA* but delivered *worn-out reforms* like *tariff packages* (since *1988*) and *privatization* of *SOEs*. *Relief* given to *real estate* and *traders* but not *working poor*. *Development spending* cut to *1% of GDP*. # *SOLUTIONS of The Problem*: ## *1. Restore Agricultural Support* Reintroduce *wheat support prices* and establish *alternative markets* before removing subsidies to protect farmers. ## *2. Increase Development Spending* Raise *federal development programme* from *1% to 4% of GDP* focusing on *health, education, social protection*. ## *3. Target Pro-Poor Relief* Provide *direct cash transfers* and *employment programs* for the *working poor* instead of *real estate* and *trader* benefits. ## *4. Implement Gradual Tariff Reform* Reduce *import duties* on *inefficient industries* like *autos* to improve competitiveness while protecting local jobs. ## *5. Accelerate SOE Privatization* Fast-track *privatization* of *PIA* and *power distribution companies* with transparent processes and worker protections. ## *6. Strengthen Rural Economy* Invest in *rural infrastructure*, *irrigation systems*, and *agricultural technology* to boost rural incomes. ## *7. Enhance Export Competitiveness* Provide *export incentives*, *technology upgrades*, and *market access* support for manufacturing sectors. ## *8. Expand Digital Economy* Create *concrete measures* for *digital export growth* including *IT parks*, *skill development*, and *internet infrastructure*. ## *9. Improve Tax Collection* Use *technology* and *data analytics* effectively to bring *tax evaders* into the net without harassing compliant taxpayers. ## *10. Achieve Balanced Growth* Target *6.5% GDP growth* through coordinated *fiscal*, *monetary*, and *structural policies* to absorb labour force. # *IMPORTANT Facts and Figures Given in the article*: - *Overall economic growth* is around *2.5%* while minimum required is *6.5%*. - Nearly *60% of population* lives in *rural areas* where *extreme poverty* is concentrated. - *Services sector* makes up nearly *60% of GDP*. - *Poverty levels* have risen to near *50%* *post-Covid* (*World Bank*). - *Inflation* is at *all-time low* expected to hover around *5-6%*. - *Tariff reform package* has been in works since *1988*. - *Maximum upper limit* on *import duties* set at *15%* in five years with *four slabs*. - *Federal development programme* has fallen to around *1% of GDP*. # *IMPORTANT Facts and Figures out of the article*: - *Pakistan's GDP* is approximately *$400 billion* (*World Bank*, 2024). - *Agricultural sector* contributes *19.2%* to *GDP* (*Pakistan Bureau of Statistics*, 2024). - *Manufacturing sector* contributes *12.9%* to *GDP* (*PBS*, 2024). - *Unemployment rate* is *6.3%* with *youth unemployment* at *10.5%* (*ILO*, 2024). - *Pakistan's debt-to-GDP ratio* is *89.6%* (*Ministry of Finance*, 2024). - *Foreign exchange reserves* stand at *$9.4 billion* (*State Bank*, 2024). # *MCQs from the Article*: ### 1. *What is Pakistan's current overall economic growth rate?* A. 3.5% *B. 2.5%* C. 4.0% D. 1.5% ### 2. *What minimum growth rate does Pakistan need to absorb labour force increase?* A. 5.5% *B. 6.5%* C. 7.5% D. 4.5% ### 3. *What percentage of Pakistan's population lives in rural areas?* A. 50% *B. 60%* C. 70% D. 40% ### 4. *What is the expected inflation rate according to the article?* A. 3-4% *B. 5-6%* C. 7-8% D. 2-3% ### 5. *What percentage of GDP is the federal development programme?* A. 2% *B. 1%* C. 3% D. 0.5% # *VOCABULARY*: 1. *Slump* (کساد) – Sudden severe decline in economic activity 2. *Macroeconomic* (کلی اقتصادیات) – Relating to large-scale economic factors 3. *Dismal* (مایوس کن) – Depressing or dreary 4. *Prevalent* (عام) – Widespread or common 5. *Stabilised* (مستحکم) – Made stable or steady 6. *Sequencing* (ترتیب) – Arrangement in particular order 7. *Cold-blooded* (بے رحم) – Without emotion or pity 8. *Middlemen* (درمیانی) – Intermediaries in trade 9. *Tutelage* (سرپرستی) – Protection or guardianship 10. *Emphatically* (زور سے) – With emphasis or force 11. *Inefficiencies* (نااہلی) – Lack of efficiency 12. *Stop-go cycles* (رک جانے والے چکر) – Alternating periods of growth and recession 13. *Bated breath* (سانس روک کر) – Anxious anticipation 14. *Entrenched* (جڑے ہوئے) – Firmly established 15. *Discern* (سمجھنا) – Distinguish or recognize 16. *Meagre* (کم) – Lacking in quantity or quality 17. *Envisaged* (تصور کیا گیا) – Imagined or conceived 18. *Paradox* (تضاد) – Seemingly contradictory statement 19. *Contraction* (سکڑاؤ) – Process of becoming smaller 20. *Drastic* (سخت) – Severe or extreme 📢 *Attention Please!* We appreciate your commitment to acquiring knowledge through our summaries. 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Click the link below to join now 🔗 [Dawn Article Summaries](https://cssmcqs.com/dawn-editorials-articles-summary-for-students-pdf-download/) *WhatsApp Channel Link*: [https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y](https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y) --- *www.dawn.com* *Dashed hopes* *Rashid Amjad* *5 - 6 minutes* WITH the real economy in a deep slump and macroeconomic indicators stable, how should we describe the current state of the economy and the direction in which we are heading? According to the just released Pakistan Economic Survey 2024-25, whatever spin you may want to give it, the economy is in a deep downturn given the collapse of the crop sector and the drastic decline in incomes in rural areas, where almost 60 per cent of the population lives and where extreme poverty is concentrated. Severe decline in rural incomes and little success in increasing exports have led to poor growth in manufacturing. A combination of the two has slowed down the services sector, which now makes up nearly 60pc of our GDP. The resulting overall economic growth is dismal at around 2.5pc, while we need a minimum growth of at least 6.5pc to absorb the increase in the labour force and reduce the prevalent high levels of poverty, which, according to a recent World Bank report, has risen dramatically, post-Covid, to near 50pc. At the same time, there is no denying the fact that the economy has stabilised. There is no threat of default given our current reserves, a stable exchange rate (though it has come under pressure), a current account surplus (thanks to a surge in remittances), and inflation at an all-time low (it is expected hover around 5-6pc). For this, the government can take full credit — a fact recognised by the IMF and rating agencies. Relief was hardly given to those who deserve it most. So, is the price that we have had to pay for macroeconomic stability a drastic contraction of the real economy? While the stabilisation measures have indeed helped, I would strongly argue that the poor sequencing of these measures and economic reforms by our policymakers are chiefly to blame. A prime example is the agricultural sector. The cold-blooded way in which the government removed the wheat support price shows the anti-rural, pro-urban bias of the current regime. Without first ensuring the development of an alternative market, it left the farmers — both small and large — to suffer huge losses at the hands of the middlemen. Now let's turn to what the future holds for the economy under IMF tutelage. In his budget speech, Finance Minister Muhammad Aurangzeb emphatically stated that we have launched on a mission 'to change the DNA of the economy from its currents inefficient uncompetitive path to one of high productivity and sustained economic growth' — or words to that effect. To put it more simply, he promised to implement economic reforms that will root out the current incentive structure, which breeds inefficiencies and inequalities and results in recurring stop-go cycles. We waited with bated breath to hear of the far-reaching reforms that are intended to usher in this process of creative destruction and the birth of a new economic order, but have been extremely disappointed. Yes, some worn-out, positive steps were announced, which have been repeatedly tried before, with little success. This includes a tariff reform package — in the works since 1988 — with a maximum upper limit on import duties of 15pc in five years and four slabs. Significantly, there was no mention of a reduction in import duties on products of our most inefficient industries (for example, autos) to improve their competitiveness. This demonstrates a lack of reluctance to take on entrenched business interests. The privatisation of the same old state-owned enterprises, such as PIA, the power distribution companies, etc, was promised. Hopefully, this time, the process will be successfully completed. A lot of faith was placed in the digital economy and increasing its export earnings (with ambitious targets), though concrete measures in this direction were difficult to discern. Relief was given under strong pressure to the real estate sector and traders, despite high hopes to the contrary, and hardly any to those who deserve it most — the working poor. And technology and data were waved around to bring more tax evaders into the tax net as if these have never been available before. Agriculture income tax was left to the provinces. Key issues related to investment in people (health, education, social protection) were rattled off, highlighting initiatives and projects by the prime minister, but the fact that we are cutting down on their already meagre share in the federal development programme, which itself has fallen to its lowest level in living memory to around 1pc of GDP, was not mentioned. Ultimately, this left us with roads and highways and infrastructure which would transform the economy. And we had envisaged this budget in the shape of a reform package to change our DNA! The writer is professor at the Lahore School of Economics and former VC of the Pakistan Institute of Development Economics. Published in Dawn, June 15th, 2025