Economist Atif Mian has expressed deep concern over the prevailing sense of despair in Pakistan as the country faces severe inflation and stagnating economic growth.
In a recent thread on X, Mian described the current situation as unprecedented, noting that the level of hopelessness on the streets of Pakistan is unlike anything he has seen before. He pointed out that there seems to be a widespread desire among people to leave the country, a sentiment supported by data he shared.
Mian included a graph that showed a dramatic increase in Google searches for the term “visa” in Pakistan compared to other countries, highlighting a surge in interest in emigrating.
Pakistan is currently pursuing its 24th loan program from the International Monetary Fund (IMF) to stabilize its economy and implement necessary structural reforms to avoid future bailouts. Last month, the government and the IMF reached an agreement on a new loan program. Despite the government’s assurances of commitment, many experts argue that these measures are insufficient. They call for substantial spending cuts and a more responsible approach from the government.
In June, the ruling coalition passed a tax-heavy budget for Fiscal Year 2024-25. Business experts have criticized the government for not addressing entrenched tax privileges, despite Finance Minister Muhammad Aurangzeb’s intentions. Taxes on the salaried class have been increased, with the rate for those earning between Rs600,000 to Rs1,200,000 per year rising from 2.5% to 5%.
Atif Mian, a renowned economist from Princeton University, noted that while poverty is a severe issue, it can also present opportunities. He pointed out that impoverished populations are often willing to work for lower wages, and with the right government support to leverage their potential, growth and prosperity can follow, as seen in countries like Vietnam and South Korea.
Former Federal Board of Revenue Chairman Shabbar Zaidi, on News Insight with Amir Zia on Aaj News last month, compared Pakistan’s economic performance with Vietnam’s. In 1990, both countries had exports worth $10 billion, but today, Vietnam’s exports have soared to $600 billion, while Pakistan’s remain at $30 billion.
Mian argued that persistent economic stagnation often results from deliberate policy choices that trap a country in a cycle of poverty. He provided a chart showing a continuous decline in Pakistan’s growth rate since the 1980s, which has worsened in recent years, indicating a stagnating economy.
According to Mian, the last two years have been the most challenging in Pakistan’s economic history, with record-high inflation and minimal growth. He contrasted this with previous global crises in 2009 and 2020, stating that the current economic difficulties are largely self-inflicted.
To escape the poverty trap, Mian emphasized the need for substantial, coordinated, and credible policy changes sustained over time.
