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Pakistan needs to change The Excelsior 10 Mar 2022
Pakistan’s advisor to the PM on commerce, textile, industry, production and investment, Abdul Razak Dawood, stated recently, ‘As far as the ministry of commerce is concerned, its position is to do trade with India. Trade with India is very beneficial to all, especially Pakistan. And I support it.’ This is not the first time the aspect of trade with India has been raised. Last year when Pakistan faced shortfalls in sugar and cotton, its Imran Khan headed Economic Coordination Council announced that it would import these from India, only to cancel it post the same Imran Khan headed cabinet meeting a day later.
The reason stated was that there could be no trade with India until it reverses its decision on Article 370. This led to Dawood stating that Pakistan must be realistic and imports from India are the need of the hour. Pakistan was forced to import cotton at much higher rates impacting its textile industry. Pakistan readymade garments manufacturers and exporters association head Ijaz Khokhar, had mentioned, ‘according to World Trade Organisation laws, no one can object to trade with another country, the restrictions imposed by Pakistan on trade with India are based on political grounds, but if we allow imports of medicines from India, then why not cotton yarn.’ There are reports that Indian goods find their way into Pakistan via Dubai at much higher rates.
Pakistan’s recently released national security policy states, ‘it (policy) places economic security at the core of comprehensive national security, emphasising a geo-economic vision to supplement the focus on geo-strategy, and recognises that sustainable and inclusive economic growth is needed to expand our national resource pie.’ It adds, ‘Pakistan’s prized geo-economic location provides a unique opportunity through north-south and east-west connectivity for South and Central Asia, Middle East and Africa.’
On multiple occasions, General Bajwa and SM Qureshi have emphasized Pakistan’s shift to geo-economics. Such was the push that Qureshi briefed all Pak diplomats to project this concept to their host nations. High sounding thoughts but far from reality.
Adopting geo-economics implies Pakistan leveraging its geography to further its economy. The only leveraging thus far, has been its offer to China to construct the China Pakistan Economic Corridor (CPEC). By this China could exploit Pakistan’s Gwadar port for import of oil from the Middle East and transport the same by road to Xinjiang. All this on the pretext of developing Pakistan.
Chinese vehicles transiting on the corridor are exempt from road taxes. The chairman of the National Assembly’s Standing Committee on Planning and Development, Abdul Majeed Khan Khanan Khail, stated in 2017, ‘We are giving roads, land and the entire route to Chinese trucks, but on what terms and conditions.’ The reality is that these roads are solely used by Chinese vehicles, but its construction is paid for by Pakistan.
The recent Indian decision to export wheat to Afghanistan is another example of missed opportunities. India could have been taxed for use of Pak roads for supply of wheat as also for provision of security during transit. In the end it was Pakistan which was the loser. Afghanistan would never pay, and Pak is forced to provide security to its convoy. Finally, both India and Afghanistan exploited Pakistan’s road space. In desperation, Pakistan removed banners stating that the wheat was a gift from India to the people of Afghanistan.
Further, for India, trade with Pakistan is nothing to write home about, but it could leverage Pakistan’s strategic space thereby adding to its revenue. A classic example are multiple gas and oil pipelines, either emanating from Turkmenistan, Russia or Iran and terminating in India, transiting through Pakistan, revenue for which would benefit Pakistan. Distrust with Pak has blocked their construction for decades.
Pakistan’s rupee has dropped 70% in 3 years, its debt is crossing USD 289 billion, and inflation is highest in its history. Its remaining on the FATF Grey List impacts its borrowings. A nation surviving on doles and loans, expecting others to invest for its development needs to be practical in its approach and exploit avenues for enhancing income. Claiming in its national security policy that Pakistan provides a unique opportunity on account of its geo strategic location, while simultaneously acting on false sentiments only sends the message that its intentions are flawed and that it remains mired in mindset prevalent half a century ago.
If Pakistan is to seriously implement its concept of geo-economics and leverage its strategic space, then it needs to drastically alter its policies. First and foremost it needs to establish peace with its neighbours, mainly India, rather than live on sentimentality and illusions. It is aware that India is too powerful a neighbour, economically and militarily, for Pakistan to rattle. India would never reverse its decisions on Kashmir nor let Pakistan succeed in fermenting trouble within it. Terrorism in Kashmir is a pinprick which India would never let grow beyond acceptable levels. Any untoward incident would be responded aka Balakote.
Secondly, Pakistan has to change its own internal atmosphere. Insecurities, growing religious fundamentalism, enhanced violence by terrorist groups along its western borders have to be curbed to enable investment and technology to flow. This rise of Bangladesh within a span of fifty years is a case in point. Can Pakistan follow this model or is it too late.
Finally, security of institutions within a country are essential for growth. Army controlled democracy with puppet prime ministers, who can be routinely overthrown are not ideal environments for investment of funds and technology. The difference between Pakistan, on one end, and India and Bangladesh on the other are examples. Bangladesh did experience military takeover, however, over the years has overcome it and democracy is firmly rooted. India’s democratic institutions are firmly in place. This has enabled development in both nations, while Pakistan is compelled to survive on loans and doles.
The problem is that Pakistan may have the right vision, but implementation is lacking. Unless there is an internal demand for change, it will continue to lumber on, struggling to survive, dependent on loans and exploited by donors. The question is whether it has the determination and will power to change.