Good governance and a fair economic system are prerequisites to build a stable, secure and prosperous society. It is achieved through an open political process and a trusted system.
Pakistan is lagging behind on all these indicators. It has impacted the country on many fronts with stability the prime causality. Further, the ruling elite has made stability quite vulnerable. They think it is safe to play in a vulnerable situation and keep their legacies alive. It is frustrating for the people. The youth are vocal and express their dissatisfaction and anger, as their future is at stake. Despite all this, it is good for Pakistan the youth believe in peaceful means of change. Against this backdrop, people, especially youth, participated in the 2024 elections.
The ground realities after the elections indicate it would be hard to restore stability in the near future. The sharp divide among political parties and the society has made it extremely tricky. The parties have become cult groups. They term their leader supreme and the rest either dumb or anti-Pakistan. The most disturbing part of the story is that no one wants to be on the losing side. If they lose, they say the process is rigged and start anti-government campaign. Since 2013 elections, Pakistan has become hostage to protests and agitation by one party or the other.
The economic situation also indicates it would be hard to bring stability in the short term. Growth, inflation level and financial health determine the state of the economy of any country. Pakistan is facing stagflation (stagnant growth, financial crisis and higher inflation). It needs huge investments to reverse the process, but does not have resources. On the financial side, the situation is even more complicated. Pakistan has to manage $27.3 billion for debt repayment and debt servicing this year. It has only $8.21 billion in kitty.
No matter who will be in power, we have to contact international financial institutions for help, especially the IMF, because without its blessing, no other will help us. In the past, Pakistan tried to bypass the IMF, but could not get help except from China. The Fund will ask Pakistan to eliminate subsidies and increase prices. It will usher in a new phase of inflation. Pakistan will have no choice except to accept it. It will further increase poverty, like the previous programmes of the IMF. However, the country can be brought back on the path of stability and development.
Pakistan has options: First, Pakistan is implementing the second phase of CPEC. China has extended full cooperation to tackle development challenges and economic growth. The speedy completion of SEZs under CPEC can further accelerate the process of creating economic opportunities. Second, Pakistan is about to sign FTA with GCC. It has special clauses for enhancing the investment. Pakistan is also negotiating investment opportunities with GCC countries.
In a nutshell, Pakistan can secure good funding and investment. However, it needs to be mindful the current system will not help break the web of problems. For a better future, the country will have to change.
The process of change must start with political institutions and political parties: Pakistan has to look for a better model of democracy. The present model is highly exclusive. It only helps the powerful to strengthen their control over the system and extract benefits. People have no say in decision-making. They are only allowed to vote and wait for the next elections to vote; the present model of democracy creates divisions in society and hinders the nation-building process. The phenomenon is not limited to Pakistan; even the most developed democracies like the US and the UK are facing the same problem.
There is a need for a model of democracy that ensures continuity of interaction between the people and government. For that purpose, leaders and State officials must live with people, not in gated colonies. As Chinese politician Chen Yun said, “They should not float above the masses but live among them as their servants”.
Genuine political parties should be established to enhance cohesiveness in society and contribute to nation-building.
There is no other choice than to change the economic structure of the country. First, redefine the structure and governance of the State Bank of Pakistan (SBP). The bank should be under the control of the State, and has dual objectives—monetary and fiscal—before the agreement with IMF in 2019. Second, Pakistan should create synergy between the visible and invisible hand. Third, create a balance between the tax and non-tax revenue. For that, redefine the role of SOEs, improve their efficiency and get rid of the mentality of privatisation. The private sector should not be given subsidies. It should learn to run business with its own resources, not with the public money. If the State has to provide billions to the private sector to make them competitive, why it not runs SOEs itself?
For governance, there is a need for deep-rooted changes. The governance system is quite complex and anti-people. It is a complicated web of relationships that runs on personal linkages, not the rule of law. The governance institutions of the country are fragmented.
Pakistan has to create mechanisms to ensure synergy and coordination among the systems and bodies of the governance system. It should be run by a set of norms, regulations and laws. The system should follow societal values and concentrate on delivering in accordance with local needs. Lastly, the system must be goal-oriented and dynamic.
In conclusion, democracy, economy and governance models must be people-centric and deliver according to the expectations of people. It is the only way to ensure stability and put Pakistan on the path of sustainable development. Frustration among the youth and the masses can further impact the stability and economic development. It will not be a good sign for the country and will serve the interests of the international establishment and further strengthen the hands of enemies of Pakistan. The international establishment has already imposed fifth-generation warfare on Pakistan. It is targeting prime sectors of Pakistan like economy, governance and security.
(To be continued)
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