Building a cohesive Pakistan through economic integration

By Dr Noor Fatima
|
March 23, 2024
A vendor holds a Pakistani flag as he waits for customers beside his stall alongside a street in Islamabad. — AFP/File

National integration refers to a society and state’s unity, regardless of differences in ethnicity, religion, language, or socioeconomic background. This “togetherness” fosters a national bond, social cohesion, and unity within diverse segments of society. It promotes political and economic integration, striving for parity despite social disparities.

While the presence of diverse groups can create complexities, national integration doesn’t necessitate uniformity in thought. Instead, it celebrates differences while fostering a sense of shared identity. This unity strengthens the nation during challenging times, both domestically and internationally. National integration paves the way for economic growth and development by reducing religious, ethnic, and cultural disparities. It allows a country to pursue its ideals in harmony, embracing its diverse tapestry.

Economic integration is a multifaceted concept. While it fosters interdependence between countries, it also interacts with national identity and economic interests. The distribution of economic activity within the integrated region can significantly impact development and inequality among member states.

Scholars like Robert O Keohane and Joseph S Nye highlight the importance of interdependence as a driver of integration. However, the interaction of political and economic actors shapes policies that influence the outcomes of interdependence at both domestic and international levels.

National interests can sometimes clash with the benefits of integration. Countries may adopt protectionist policies to reduce external dependence. Yet, strong institutions of global governance remain essential for shaping effective economic policies.

Addressing disparities and ensuring equal access to resources are imperative for fostering national integration, as they impact the size of the market for different classes to benefit from economic dividends.

Rule-based institutions play a vital role in national integration, ensuring equitable treatment before the law and preventing elite capture of resources.

To achieve economic integration and cohesion, a well-functioning single market is essential. This market should be competitive and ensure fair resource allocation.

A shared vision of a “common future” could bridge this gap. By fostering a sense of collective well-being and ensuring just and equitable resource distribution among its 230 million citizens, Pakistan can unlock the potential for economic integration and national development.

The China-Pakistan Economic Corridor (CPEC) has the potential to contribute to national cohesion and just resource distribution, but its success hinges on effective implementation and management.

CPEC’s infrastructure development projects (roads, railways, ports, and energy facilities) could foster economic integration by distributing benefits to a wider range of economic groups across Pakistan and enhancing connectivity between different regions.

Equitable regional development is crucial. By prioritising infrastructure investment in less-developed areas like Balochistan and KP, CPEC can help reduce regional disparities and achieve more balanced growth.

Investing in human capital through CPEC and other projects can create jobs. This should involve an inclusive approach, focusing on both skilled and unskilled labour, while also ensuring gender parity by promoting women’s participation in these projects.

Industrialisation, particularly in Special Economic Zones (SEZs), has the potential to stimulate economic growth nationwide. By attracting industries to set up operations in these zones, job creation can be fostered across various regions of Pakistan.

Energy security is another crucial factor for national cohesion. CPEC’s energy projects aim to address Pakistan’s energy shortages, which can help reduce disparities in access to reliable and affordable energy. This, in turn, can support industrial growth and economic development throughout the country.

However, achieving development goals must be balanced with environmental considerations. Climate change and environmental degradation pose major challenges to social cohesion. Large-scale projects, like dams or highways, can lead to community displacement if not managed properly.

Investing in human capital is critical for national integration. By improving access to quality education and healthcare across the country, disparities can be reduced and social cohesion fostered. This includes investing in vocational education to equip the workforce with the skills needed for a competitive economy.

Small and Medium Enterprises (SMEs) can play a vital role in spreading economic benefits more evenly. Supporting SMEs requires providing them with access to finance and markets, allowing them to flourish and contribute to national growth.

Creating a level playing field for economic activity is essential. Streamlining regulations and reducing bureaucratic hurdles can significantly improve the business environment. Pakistan’s initiatives like the Special Investment Facilitation Council (SIFC) are positive steps towards attracting foreign investment and stimulating economic growth.

Simplifying business registration processes, improving contract enforcement mechanisms, and ensuring transparency in regulations are crucial steps. These reforms will not only enhance Pakistan’s reputation among investors but also foster inclusive growth, ultimately contributing to national integration. Additionally, effective enforcement of competition laws can prevent monopolies and unfair practices, ensuring a level playing field for businesses across the country. This allows all regions to participate in economic integration and benefit from its advantages.

Financial inclusion is another key element. Providing access to finance in less developed areas is essential for empowering SMEs and startups. The government can achieve this through initiatives such as:

Reducing income inequality is crucial for national integration. This can be achieved through equipping the workforce with relevant skills to enhance their employability and earning potential.

A tax system that distributes the burden more equitably can reduce the strain on low- and middle-income earners. Broadening the tax base can also generate additional revenue for development initiatives. Implementing these reforms will foster a sense of fair treatment among citizens, potentially leading to increased tax compliance and contribution.

Respecting provincial autonomy and constitutional rights creates a stable foundation for economic activity. By working together within a framework of mutual respect, federal and provincial governments can promote a sense of shared prosperity and national unity.

The ultimate goal of policymakers should be to create an environment that maximises social well-being for all citizens. This requires a strong sense of national integration, where diverse populations feel united by a common purpose. Throughout history, nations that have lost sight of this unity have faced internal and external threats.

National integration is fostered by institutions that promote fairness, equity, and opportunity. The measures discussed above, such as investment in human capital, development of a level playing field for businesses, and ensuring secure property rights, all contribute to this goal. By building a more integrated and inclusive economy, Pakistan can lay the foundation for sustainable development and national cohesion.