Peace, stability, reforms — prerequisite for development

After a gloomy economic performance of several years, Pakistan entered into the economic stabilisation phase in the last two years due to prudent policies, introduced by Pakistan Muslim League-Nawaz (PML-N) government after coming to power in May 2013. Pakistan’s economy was literally in Intensive Care Unit (ICU) when PML-N assumed the charge of government because all economic indictors were showing sharp downward trends. The growth rate, inflation, foreign direct investment, foreign exchange reserves and above all the international credit rating of the country; all were rolling fast on the downward slide. Prime Minister Nawaz Sharif and his team had the first and formidable challenge to stop the economic downslide. In a short period of two years, by the grace of Almighty, the present government successfully managed to arrest the negative slide in economy by pushing it into stabilisation phase. One should not remain in quandary over this economic stabilisation when international Credit Rating Agency Moodi and international media outlets are commending Pakistan over this recovery. One must be mindful about the enormous challenges that came in the way of achieving economic stabilisation when terrorism was raging fire across the country and law & order situation was not up to the mark. This great achievement wouldn’t be possible if the government had not followed prudent policies and good governance despite odds of various sorts. Is economic stabilisation the final goal? No, it is not. The economy is now in takeoff phase and on the runway for takeoff. What does economy need for smooth takeoff and how can greater agenda of development be achieved. The worldwide successful stories of development explicitly tell about three factors, which are believed to be panacea of development. These are peace, stability and reforms that put a nation or a county on trajectory of development and prosperity. We need to understand that development can’t take place without harmonizing peace, stability and reforms.
A peaceful country is an attractive destination for investment. A disturbance in law & order is frightening enough for investors to shy away from the country. Likewise stability; both political and economic is a pre-requisite for development. This is a common lesson from the experiences of all successful nations. We have China, our time-tested and all-weather friend next door. The marvelous success of China to emerge as the leading economy of the world is a glaring example of how peace, stability and reforms translated into accelerated development that China is experiencing. The peaceful environment, consistent economic policies and necessary reforms to keep pace with the fast changing global trends resulted in the birth of new China. In a relatively short time, the Chinese people have emerged from the darkness of utter poverty and deprivation into shining example a transformational change within a generation. Geography made Pakistan and China neighbours and luckily both have cordial relations that have now transformed into geo-economic partnership after launching of China-Pakistan Economic Corridor project. At a time when Pakistan is poised to benefit enormously from 46 billion dollar Chinese investment, the neighbouring country offers more for Pakistan in the form of its successful development story, from which many lessons can be learnt. The present government has adopted a transformational agenda of Pakistan Vision 2025 to help Pakistan leap into the ranks of middle income growing economies by deepening structural reforms in political and economic sectors and leveraging its youth bulge. An environment of peace and security is a prerequisite to creating peaceful conditions for sustained economic growth and prosperity. The specter of conflict, however, both domestic and regional, threatens to stymie Pakistan’s efforts. The last decade has seen an implosion of various internal security crises in Pakistan. Various conflict fault lines - militancy, terrorism, sectarianism, insurgency and regional disparities mark Pakistan’s societal fabric creating hurdles in its path to progress. Absence of conditions of peace can not only slow Pakistan’s growth trajectory, they can also deeply impact lives of ordinary Pakistanis by pushing them further down into poverty.
The Planning Commission of Pakistan mandated with the development across the country identified the link between peace & stability and development in its Vision 2025. Led by this vision, Planning Commission set up a Peace & Development Unit to raise awareness on the subject, integrate peace and stability and also conduct assessment studies on peace and conflict in the country for policymakers and public.
In the words of legendary Nelson Mandela “Peace is the greatest weapon for development that any person can have”. The visionary approach of great Mandela applies both to individuals and nations. We can also draw lessons from Mandela’s words that peace is the only way forward for us to move towards development. Unfortunately, we remained entangled in unnecessary disputes and conflicts that had direct bearing on development. Pakistan paid a heavy price for becoming a party in disputes in the shape of colossal human lives loss and huge economic decay. Pakistan can’t afford more disputes and advocates a policy of peaceful co-existence. This is part of development agenda of the present government, which aspires for peaceful environment in the region and world at large. The policy of maintaining cordial relations with the all countries of region is outcome of development agenda that peace in the region can usher into era of prosperity of entire region. After ensuring peace in the country and advocating it in the region, stability is another pillar that Pakistan needs to raise the structure of sustained and inclusive economic development. Inconsistency in policies particularly economic cost Pakistan heavily when regimes change in the past abandoned even prudent and vibrant economic policies. Pakistan needs consistency in policies and present government believes strongly in it that without having consistency in the policies, it can’t attract foreign direct investment or sustain the growth in exports, which are the two key factors for economic development in any part of the world. Therefore, government has followed a policy of inclusiveness and participation in key policies. Example of which are consensus on National Action Plan against terrorism and China-Pakistan Economic Corridor (CPEC).
The third pillar i.e. reforms has assumed critical role in development equation. Today, world is witnessing unprecedented change. Explosion of knowledge is taking place with exceptional growth. Keeping pace with emerging trends and challengers through reform of internal capabilities because alignment between capabilities and new challenges is key to success
Cumbersome regulatory framework and red-tapism blocked the way of Pakistan’s economic development in the past. Reforms in various sectors are required to align with the fast changing needs of the economic development. If we glued with the policies of colonial era or of 50s, 60s, 70s or 80s, we are bound to end up with failure. Pakistan Muslim League-Nawaz (PML-N) introduced the economic reforms in 90s during its first government. Unfortunately these reforms couldn’t bear the desired goals due to political instability and later on Martial Law regime couldn’t keep pace with the development. The economic reforms were effectively followed by our neighbouring country India, which overtook us in growth. But we couldn’t take advantage of them despite being pioneers due to instability and lack of continuity. The government has embarked upon an ambitious agenda of reform to modernise public sector into high performance service provider. However, reforms require environment of continuity as they bear fruits in medium and long term.
Pakistan - homeland of almost 200 million people - bestowed with the immense natural and human resources is unluckily placed in the lowest bracket of social indicators. The state of health, education, social justice etc is in tatters. The under-development on the economic front is the real cause behind this poor state of social issues. One question often strikes the mind; whether we Pakistanis are destined to live like poor creatures. Of course, not. We have the power to change our fate. This fate-change can be made possible only after we realise that economic development should be foremost agenda of each and everyone. Today, with peace, stability and reform thrust, we can overcome all challenges American scholar Stephen Cohan once remarked; “Pakistan is not failed but crawling nation”. We can prove his judgement wrong by leapfrogging on the economic front by showing 7% growth rate of economy. We have broken the barrier of 4% growth rate after six years. If we continue to follow path of peace, stability and reform with consistency we can achieve 7% growth rate by 2018. Likewise, we need to cross $150 billion mark in exports by 2025 if we have to translate our dreams into reality. But to do so, we need to show parochial politics, overcome petty differences and think positive about our future.
The author of the article is Federal Minister of Planning, Development & Reforms and Deputy Chairman Planning Commission of Pakistan