Its a wake-up call for the country; those at the helm of policy making may continue to rant about their undue contribution to the economy, but all claims seem to celebrate in abysm.
Tumbling like so many dominos, not a single global index or ranking has celebrated striding improvement this year so far. And now down a few more rungs on the financial development ladder, Pakistans status is not surprising at all.
Hobbled by self-inflicting wounds, the economic progress in the country is on the ropes. And with languishing financial development, significance of which has apparently become very prominent to the economic growth, precarious times for recovery stall ahead.
Pakistan illustrated weakness across most of the pillars in the Financial Development Index 2012. The countrys one of the lowest standings in the institutional and business environment bears testament to the underdevelopment in the same. On the degree of financial sector liberalisation, Pakistan, an advancing financial market, is categorised amongst the conservative lot.
Slipping three notches down the overall index to 58 out of 62 in 2012, the countrys financial development journey downhill was made sheer by a retreat in financial access, be it retail or commercial.
In addition, Pakistan has also shown a lack of financial intermediation specifically weighed down by the meager IPO activity, mergers and acquisition, insurance and securitisation. Amid such headwinds, improvement along financial stability highlighted by banking systems stability and securities exchange regulations hued by various recent initiatives, are some good news.
Like the ease of doing business symptomatic of the overall local and foreign investment climate, the absence of a sound financial system is also a major hindrance in attracting direct foreign investment in the country.
With global recovery struggling and uncertainties gathering around both the local and international landscape, the task for the policy makers and the strategists is to join the stampede for improvement. Its been too long being classified amongst the laggards!
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PAKISTAN FINANCIAL STABILITY RANKING
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2012 2011
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Overall 58 55 -
Institutional Environment 58 57 -
Business Environment 58 56 -
Financial Stability 50 52 +
Banking & Financial Services 54 49 -
Non-Banking Financial Services 55 54 -
Financial Markets 38 37 -
Financial Access 61 57 -
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Source: FDR 2012 WEF
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