Pakistan is desperately looking for options to overcome economic and financial challenges. These are not new challenges. The economic and financial difficulties have been frustrating Pakistan for quite some time. The successive governments failed to present any viable solution to overcome these challenges. Instead, the successive governments contributed to worsening the economic and financial crisis. Wrong policy choices and obsession with donor-funded solutions have deteriorated the economy. Moreover, short-sighted decision-making by the ruling elite has further complicated the situation. They cannot comprehend that economic growth and development is not a short-term project.
The review of world economic history reveals that economies can neither deteriorate nor revive quickly. It requires patience and wisdom to steer the process in an orderly manner. Economic revival is only possible through a suitable set of policies, consistency in implementing policies, and applying indigenous wisdom to lead the way of economic revival. The policies, models, or plans must be devised or tailored according to the needs of the country.
Unfortunately, this is not happening in Pakistan. The ruling elite has turned Pakistan into an experimental lab for “Fancy Ideas” or “Fancy Models,” which do not correspond to the needs and ground realities of Pakistan. Right after independence, Pakistan started with a capitalist and liberal economic model. Then, Pakistan moved to socialism in the 1970s. The 1980s began with the slogan of the Islamic system and economy but without any practical intervention. Since the late 1980s, Pakistan has been implementing a liberal economic order and following the so-called Washington consensus. It has greatly impacted the economic and social fabric of Pakistan. Due to the wrong policies and practices, Pakistan has become home to numerous challenges. Thus, there is a need for course correction.
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However, before designing any policy or action framework, Pakistan must concentrate on six “What’s.” First, what is required to revive the economy and bring back growth, employment, and development? Second, what should be done to uplift the living standard, ensure the prosperity of everyone, and tackle issues like poverty, food insecurity, unemployment among youth, etc.? Third, what resources does Pakistan have in pocket to invest? Fourth, what should be a strategy to execute the policy or plan? Fifth, what is the state or quality of human capital? Sixth, what are systems for the equal distribution of resources and opportunities? Moreover, Pakistan will have to search out which country or region can help give impetus to economic revival by acting as an anchorage country. A comprehensive discussion on the above areas will help rationalise the policy and action framework.
On the basis of answers to six ‘whats’, Pakistan should devise a long-term agenda like the “Economic Agenda 2047,” and a phase-wise strategy should be designed to achieve the said agenda. Pakistan should design each step focusing on the country’s ground realities and development status. However, it is pertinent to mention here that each phase should only highlight the priority areas for that phase. The State should communicate to the masses clearly that the priority of one area does not mean that other areas should be neglected.
Moreover, every phase should be tagged with a proposed GDP and priority areas. For example, the State can set GDP targets and area selection for each in the following sequence. In the first phase, Low-Hanging Fruit (two years), the State should set a target of $500 billion in GDP. The priority areas for the phase should be agriculture, mining, IT, and tourism. In the second phase, Short Term (five years), the GDP target should be at $700 billion for GDP. The priority areas for this phase should be SMEs and industry. In the third phase, the Medium Term (15 years), the GDP target should be $1.5 trillion, and the priority areas are industry, agriculture, IT, and SMEs. In the fourth phase, Long Term (24 years), the GDP target should be $3 trillion, and priority areas should be services, industry, and SMEs. These targets will help to steer the economy in the right direction.
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The next step for the State should be to follow a realistic policy and implementation framework to modernise or develop the country. For example, we have witnessed in the recent past many politicians raised ‘Made in Pakistan’ slogans, but at this point, this slogan is irrelevant to Pakistan. Why? Right now, Pakistan does not have the resources or capacity to develop a brand; even the most prominent export sector, textile, does not have brands of global relevance. Similarly, Pakistan does not have the required resources and capabilities to produce hardware for IT or industry.
Against this backdrop, the dream of being ‘Made in Pakistan’ is a long-term dream. Thus, it is advised that Pakistan start with small steps. One available option is inclusion in supply chains. Under CPEC cooperation, Pakistan can ask China to include some Pakistan companies in the supply chains of Chinese products. For example, car production is one sector where some Pakistani SMEs can easily be included in supply chains. Some SMEs in Pakistan can produce quality nuts and bolts. Other producers or SMEs can produce leather products for Chinese car manufacturing companies. These are only two examples; we can find other areas for supply inclusion with other countries. Thus, it is believed that Pakistan can benefit immensely from this policy.
Regrettably, Pakistan is not focusing on supply chain inclusion right now. Pakistani exporters, like textiles and others, are happy to be suppliers. This is not a sustainable practice.
After formulating the “Economic Agenda 2047”, the State should communicate the agenda to the masses with realistic timelines. There should be no dream selling. For example, there should be no slogans of economic turnaround in 100 days or a few months. The State should communicate that economic revival and development are long-term programmes. It takes time to reach the goal. Thus, people will have to show patience and wait for the results. Simultaneously, the State will have to work to keep hope alive, and truth will be the best instrument to keep hope alive.
Lastly, Pakistan must reform rather than overhaul the system to achieve the desired results and goals. It is not a matter of choice; it is mandatory if Pakistan wants to realise the dream of sustainable development.
To be continued…
THE WRITER IS A POLITICAL ECONOMIST AND A VISITING RESEARCH FELLOW AT HEBEI UNIVERSITY, CHINA
Published in The Express Tribune, December 4th, 2023.
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