Saturday June 22, 2024

What should Pakistan do? ( Part – I )

We have three neighbours with whom we share a significant border, our relationship with neither of them is ideal

By Asad Umar
March 10, 2024
Pakistans Flag flutter at the headquarters of the Shanghai Cooperation Organisation in Beijing on July 4, 2023. — AFP
Pakistan's Flag flutter at the headquarters of the Shanghai Cooperation Organisation in Beijing on July 4, 2023. — AFP

Let's face it. There is something seriously wrong with the way this country has been run for decades now. Consequently, the world has passed us by as we watched – from a time when Pakistan was not just the best-performing economy in South Asia but also a star in the developing world to the current situation where we are the laggards even in South Asia.

Globally and even regionally our slide into increasing irrelevance is glaring and irrefutable. We have hit a point recently where trust in the state and faith in the future of the country both seem to be at an all-time low. Surely a country of nearly a quarter of a billion people, a nuclear-armed state, endowed with substantial natural resources, can and must do better.

However, there is a saying that if you always do what you have always done, you will always get what you always got. So, continuing with what we have been doing and thinking it will get us different results is simply delusional. Clearly, things need to be different.

This is the first of three articles in which I will try to cover the major decisions that Pakistan needs to take if we want to break out of the morass we have sunk into. The first article covers our relationship with the world, especially our neighbours. The second will cover our political and governance system. The final article will deal with the economy.

We have three neighbours with whom we share a significant border. Our relationship with neither of them is ideal. India is of course a special case and there are plenty of legitimate grievances that Pakistan holds in this bilateral relationship. However, despite these differences, we have come close to a breakthrough in the Indo-Pak relationship on more than one occasion in the past. So, the lesson is that it can be done.

The advantages of improving the relationship are huge for both countries. One of the biggest drivers of economic growth for any country in the world is intra-regional trade. South Asia has the lowest intra-regional trade as a percent of the regional economy. For Pakistan, the obvious advantage is the massive Indian market with significant cultural and linguistic overlap.

India is regionally boxed in with Pakistan controlling the access to Iran, Afghanistan and through them the Central Asian states for India. Just in the field of energy, the advantages are massive. During a seminar in Delhi, I once presented what an integrated regional energy grid, both for gas and electricity, might look like and the massive advantages it would create for all the countries of the region.

The benefits of an improved India-Pakistan relationship would not just be economic. Forces in both countries that pursue extremist agendas based on hate have been strengthened by the hostile relationship between the two countries. A reduction in hostilities would strengthen forces in both countries that promote peace and social harmony. In my opinion, the benefits in both countries, based on the current state of politics in India and Pakistan, would be even greater for India – even though Pakistan would also significantly benefit.

Unless there is peace and prosperity in Afghanistan, any peace in Pakistan will continue to be fragile. Our relationship with Afghanistan has been moving between cold and hostile for most of the past three decades. This obviously needs to change. With such huge cultural, linguistic, and religious overlaps, the Pakistan-Afghanistan relationship has to be one of our biggest assets. The relationship with Iran is not hostile but is a far cry from the days of the RCD (Pakistan, Iran and Turkey). Again, the common heritage means that there is so much more to build upon and strengthen this relationship. The improvement in the relationship between Saudi Arabia and Iran creates more space for Pakistan also in this regard.

Globally, we need to have clarity on where we are going to stand in our relationship with the West led by the US and with China and Russia. We have bitter lessons from our past of the consequences of getting dragged into camp politics in a global rivalry. We have major interests aligned with both China and the US. China has been the biggest foreign investor in Pakistan in recent years, a big bilateral debt provider, an increasing source of military technology, and has stood with Pakistan in its strategic interests consistently over the years on all global platforms. So clearly this is a relationship with our ‘iron brother’ that should be cherished and nurtured.

However, the importance of our relationship with the US must not be underestimated. The US is the largest export market for Pakistani goods by a large margin. It is also the fourth largest source of remittances. A large number of Pakistanis go to study and work in the US, getting access to the best educational institutions and leading tech companies in the world. This is a tremendous asset for Pakistan that we could do much more to take full advantage of. Of course, Pakistan's continued reliance on global multilateral lending agencies and the critical role the US plays in these institutions cannot be ignored.

While we are not in a hostile relationship with the West, the bonds have continued to weaken, and Pakistan is worse off as a result. Almost none of the leading Western companies that have world-leading positions in the most significant sectors of the global economy have any significant operation in Pakistan. Even worse, some of the biggest names in the corporate world who had operations in Pakistan have either left or significantly reduced their footprint in Pakistan. This is a cause for very serious concern and has been largely left unaddressed.

There are evidently some big decisions that Pakistan needs to take in its relationship with the world without which the massive challenges we face may be insurmountable.

To be continued

The writer is a retired corporate CEO and former federal minister.