Friday May 24, 2024

Guarantor of stability?

By Dr Farrukh Saleem
December 24, 2023

In recent months, Pakistan’s economic landscape has witnessed significant transformations through major global investments. Yes, prominent global corporate investors have now begun exploring Pakistan as a potential investment destination. Saudi Aramco has acquired a 40 per cent stake in Gas and Oil Pakistan. Etisalat has invested $400 million in acquiring Telenor Pakistan. Shanghai Electric has secured $2 billion for a massive Thar coal-fired power project. Wafi Energy has entered Pakistan by acquiring a majority stake in Shell Pakistan.

The Shanghai Electric booth at an exhibition in Shanghai on Sept 20, 2018. — AFP
The Shanghai Electric booth at an exhibition in Shanghai on Sept 20, 2018. — AFP  

What does this mean? To begin with, these developments coincide with positive economic indicators, including a current account surplus, robust performance in the stock market, higher revenue collection and higher cotton production. Pakistan’s economic outlook appears promising, attracting significant international attention.

According to Fitch Ratings Inc, an American credit rating agency and one of the ‘Big Three’ credit rating agencies, “elections could endanger the durability of recent reforms and leave room for renewed political volatility” adding that “the uncertainties surrounding the upcoming elections and the potential for ensuing political volatility, which could impact the implementation of structural reforms and pose economic challenges.”

According to Fitch: “At end-September, maturities in the remaining three quarters of FY24 were just over $7 billion,” and that the “funding target included $1.5 billion in Eurobond/sukuk issuance and $4.5 billion in commercial bank borrowing, which will likely prove challenging”.

Pakistan cannot do without a ‘guarantor of stability’; an entity, an institution or a particular mechanism that plays a crucial role in ensuring and maintaining stability. Pakistan needs a reliable and a consistent force that helps prevent or mitigate factors that could lead to political instability, economic uncertainty or both. Pakistan cannot do without a ‘guarantor of stability’, an organization or an institution that works towards three things: maintaining order, security and predictability within our political and our economic system.

To be sure, there are certain entities or mechanisms that are essential for preventing or addressing factors that could disrupt the stability of a system. Pakistan cannot do without three things: policy continuity, reliability and proactive measures in maintaining stability over time. Amidst the evolving economic landscape and impending political changes, the call for a ‘guarantor of stability’ is becoming more pronounced, emphasizing the critical need for entities or mechanisms that contribute to the country’s resilience in the face of challenges.

As Pakistan charts its course through these extremely testing times, the need for a steadfast ‘guarantor of stability’ becomes paramount. Let us not merely celebrate the current economic feats but recognize the imperative for a ‘guarantor of stability’; an entity or an institution committed to maintaining three things: order, security and predictability – all three in the face of uncertainty. An entity or a mechanism that will safeguard Pakistan’s stability against the unpredictable tides of politics and economics.

The writer is a columnist based in Islamabad. He tweets/posts @saleemfarrukh and can be reached at: