"Pakistan can either fail or succeed"
The world has suffered from two major tragedies and so is Pakistan. First, the global coronavirus pandemic. And second, a devastating economic downturn in 2008 took nearly every nation in the globe by storm. There were no winners on both occasions, everyone was suffering financially. But while we tried hard to stop the spread of COVID-19, nothing worked and more than 2 million people were infected around the world. The result was a worldwide recession, trillions worth of debt, and millions of job losses. It also led to the rise of right-wing extremists who believe that all Muslims must be killed. This economic crisis also made politics the next target and thus led to the emergence of populist leaders like Donald Trump. In this article, I would like to talk about what is going wrong with Pakistan's economy, why this matter, and how I see things panning out after such a difficult time.
The problem lies within one party
Imran Khan says he wants to end corruption in Pakistan and make the system run smoothly. He promises to fight the "mafia" (wealthy men) and not let them control the government. Unfortunately, this seems impossible, especially after the Supreme Court ordered his removal following massive protests and demonstrations all over the country. So far, Imran has kept mum about whether or not he will continue to serve the country's prime minister position or leave the office due to the ongoing protests against him. His silence speaks volumes.
In fact, there are very few other options now for those who still believe that "all Muslims are equal" and that only the rich should be in power. They want to make sure the poor man who lives in poverty goes hungry and dies without food. The police and army officials who have been sent home are crying foul and demanding their reinstatement while Imran remains unconcerned. With so much frustration and anger boiling up in the masses, there is little hope for any improvement. It’s like a dog biting its tail. We have seen where human kind is driven mad, they will do anything to survive even if it means dying of hunger or thirst. If this continues then we should expect to witness another round of civil war between the ruling class and opposition so far. That being said, I am optimistic that we soon will find an answer, and most importantly, we are likely to save ourselves from another tragedy like the pandemic which unfortunately happened to us. Now with these negative thoughts in mind here is my take on a solution to Pakistan’s current economic woes.
The best option for you is probably to read some articles like below :
Away from Violence and Politics-Pakistan Is Going to Bankrupt Us Again
Pakistan Has No Future if Elections are held Today
Now, I understand you might not agree with me. You may say that this is too much responsibility for a small sovereign state like Pakistan but I assure you Pakistan has the potential of becoming the greatest superpower if only they work together and change their mentality. To put it simply if there is any issue that needs to be solved then we need to come together (Pakistan) and decide something about it collectively. As simple as that. Let us take stock and figure out a possible course of action before deciding on any further steps. It is in light of this that I propose three ways to take Pakistan out of the currently worsening situation and possibly help bring prosperity back into this once-great nation. At present, the first thing I suggest is “Pakistan can either fail or succeed”. Let us look at each other’s faults and see what needs to be done to move ahead. Then I propose the second and third alternative which is the establishment of new institutions that would ease the burden of Pakistan’s leadership. These institutions could include; International Monetary Fund (IMF), United Nations Security Council(UNSC), and World Trade Organization (WTO). It may sound crazy, but we are talking about money that is already printed and there are hundreds of billions of dollars sitting outside Pakistan! However, with the IMF coming after Pakistan and the UNSC standing alongside her, I can guarantee that no amount of gold printing can make Pakistan’s economy prosper. After all, what is the point of creating a lot of money and investing so much when none of it will actually go to productive use? In addition, since the IMF has taken a huge chunk of Islamabad’s assets, why can't we consider using it to lend directly to enterprises then invest elsewhere?
The third option is setting up trade agreements like ASEAN which includes China and South Korea. Many in India would immediately jump on board if they thought of doing such a deal, and we all know that there is strong Chinese interest in Asia. Thus, allowing India to export to China would create multiple foreign direct investment opportunities and boost Pakistan’s exports. On top of that, both countries will benefit from preferential tariffs to help reduce imports. Finally, if Russia decides to invade Ukraine and set off the conflict, we would be able to send troops to assist in the evacuation process and thus reducing tensions and the possibility of an attack. All in all, Pakistan’s economy can improve quite quickly, but we still have to remember the reasons for us to want a better future.
Let us also compare Pakistan to Bangladesh, a neighboring country.
According to experts Pakistan was the 18th largest producer of wheat and the 10th biggest exporter of fertilizers. Their export earnings accounted for 60% of GDP and they exported $7 billion worth of goods worth $6.1 billion! Yet, according to the UN, 90% of their grain is used to make animal feed and the remainder is exported to Indonesia, Vietnam, and Malaysia. Also, their population is growing rapidly because approximately 4 million workers can produce 25 million to 30 million kgs a year! So, I guess what is taking place is similar in magnitude to Bangladesh. In 2019 alone 1.5 billion people live in Pakistan but according to their census, only 3 million had access to formal education or training. Compared to that, only 0.3% of Bangladesh’s population has access to formal education, meanwhile, 7% of the workforce is informal or freelance. Thus, what I am saying is that a large part of the population in Pakistan is living below the poverty line and thus unable to provide adequate income to keep their families fed and healthy. I wish we could take care of their less fortunate members of society but that will be too challenging for today’s developing nations and therefore not realistic. Since they have limited resources, let’s just make sure that there is no exploitation of others. One common problem with Bangladesh is the lack of proper infrastructure like roads, telephony etc; this makes getting assistance that much harder as well as restricting business growth because it is rather costly to start a manufacturing plant from scratch. Even though Pakistan already suffers in terms of financial crisis, having sufficient human resource is critical because in the event of a recession Pakistan will suffer greatly. For instance: a recent study shows that it cost about US$ 1.2 trillion to build the Berlin wall in Germany. Imagine the same amount spent on building infrastructures for 20 thousand villages in one day and that would require close to 40 years worth of funding.. And then multiply to 100 thousands of villages... Which brings us to my final proposal which is bringing in IMF and the WTO. When the IMF comes in, Pakistan will now have the opportunity to borrow from the international organizations so the loans can actually be paid back in full instead of waiting for Pakistan to declare bankruptcy, which could happen next month. Moreover, with the IMF lending money, Pakistani businesses will be given the chance to grow much quicker. Of course, there are still going to be concerns related to currency fluctuation during a period of instability, however, that should be easily sorted with the creation of a central bank that would regulate currency markets. While there will always be a concern that IMF and WTO loans can be subverted, we can eliminate the chances of such a problem through better coordination, efficiency, and greater transparency during the loan disbursement process. Therefore, Pakistan can avoid bankruptcy and at least avoid losing important investments. Lastly, we can lower the price for various products and services from 5% to 2%. This will definitely help farmers earn more money which in turn will stimulate local production and employment growth. By creating incentives both within and outside the country, we can ensure that private sector companies work harder as to increase productivity and economic growth.
The above solutions have helped me figure out the problems behind our economy, which was initially based on corruption, nepotism, and patronage when in reality there were a number of issues that needed addressing. Not only that but each of these solutions is going to take considerable time to implement so they will require concerted efforts and collaboration of different stakeholders like investors, businessmen, media houses, etc. Although all these ideas sound good and feasible, it all depends upon how fast Pakistan can adopt and implement them. The sooner we get our act together and solve this mess the better. I think it’s time for us to wake up and realize there is nothing left to lose.
Engr.Muhammad Idrees
Islamabad ( idrees44@yahoo.com)
