The first democratic transition in the history of Pakistan is a landmark in its political development and the decisive win by Nawaz Sharif enhances stability and confidence. Unfortunately the Pakistan economy has performed badly in recent years and the infrastructure is indeed crumbling. The election result provides an opportunity to raise external financing, and the GCC countries have indicated their willingness to help.
One obvious first step is to issue Sukuk to finance the expansion of electricity generating capacity. Electricity prices will have to rise to make such financing viable, but the government has the political mandate to raise prices in stages. The phasing out of subsidies should also be a priority, with the resultant savings used for infrastructure investment. Action is clearly needed now during the government’s honeymoon period. Delay will result in a missed opportunity.
RODNEY WILSON
Emeritus Professor, Durham University, UK; Visiting Professor, INCEIF
Islamic finance can always play a beneficial role in infrastructure development. However, Pakistan needs to first fix the problem of political violence. Once this is fixed, more foreign direct investment will follow. Islamic finance cannot play a role here.
MONEM SALAM
Director of Islamic investing/deputy portfolio manager, Saturna Capital