Monday April 22, 2024

Tackling economic woes

By Abdul Sattar
November 19, 2019

The recent statement of Chinese Ambassador to Pakistan Yao Jing augurs well for the debilitating economy of the country. The envoy while talking to the media recently in Quetta said that China is setting up 19 factories in Gwadar. He expressed the desire of his government to contribute towards the development of Balochistan’s mining, agriculture, fisheries and water sectors, adding that the Chinese consulate is easing visa procedure for the provincial business community.

There have been speculations in the past regarding Chinese interests in Balochistan with some elements claiming that Beijing is only interested in exploiting the mineral resources of the country's largest province but Jing has rebuffed these speculations. The envoy claims that Chinese companies have been working on the provincial irrigation sector in order to help Balochistan which has been marred by a water crisis; 50 vocational centres are reportedly also being established to polish the skills of the provincial youth.

It is heartening of see that Pakistan's all-weather friend is ready to help us out. Balochistan badly needs sources of employment. It is brimming with natural resources but unfortunately its human development index is the worst in the country. Some parts of Balochistan are the poorest in South Asia. Child mortality is said to be highest in the region in some parts of Balochistan. Malnutrition, extreme poverty, lack of health facilities, shortage of quality educational institutional and unavailability of skill development sectors are some of the factors that are fueling anger among sections of Baloch society.

One of the ways to fight this resentment is to provide employment opportunities to disgruntled Baloch youth. It is very unfortunate that the entire country has been benefitting from the natural resources of the province but the state has demonstrated indifference to the development of the province. Now, the government has a chance to avail the offer of Chinese companies and government, so that the long dream of development can be turned into a reality. The Chinese envoy reportedly talked about the hurdles caused by some government departments. The government should promptly look into this matter. The Balochistan government should also seize this opportunity, addressing the hiccups that might hamper Chinese investment.

Cash-starved Pakistan's economy badly needs investment. The country had been promoting various offers of investment but Western companies have not paid any attention at all. They assert that terrorism and other factors prevent them from pumping money into a country that was on the forefront of the 'war on terror', losing more than 60,000 lives and suffering from a financial loss of over $150 billion.

It was not only parts of Pakistan that were on the hit list of terrorists but Western capitals and cities were also their targets. By battling them, Pakistan not only restored peace in the country but also helped the Western world. Unfortunately, they neither invested during the insurgency nor did they show a keen interest to pump money into our economy after the restoration of peace. Unlike Western companies, the Chinese came forward with a helping hand. They not only supported the country by announcing to make a huge investment but also threw support behind Islamabad at international forums.

It is because of the commitment of Chinese companies to make a massive investment in Pakistan that other countries are also now planning to consider Pakistan as one of the destinations of business and commercial activities. Recently, Taiwanese companies have also shown a keen interest to pump money into country's textile sector. Pakistan needs more innovation in textile and other sectors of the economy. Taiwan is one of the best countries for textile products. Its sophistication in this sector has also caught global attention with teams in the football World Cup of 2018 using Taiwan-based fabric. The tiny industrial country, which China considers its part, has also designed products for global brands like Nike and Adidas. The Taiwan Textile Federation's President Justin Huang recently visited Pakistan, expressing the desire to explore the country's economic potential. He underscored the need to ease the visa policy for Taiwanese businessmen. This is something the government can easily do if it wants to attract foreign investment.

With rising inflation, falling GDP growth, shrinking business activities and skyrocketing cost of doing business, Pakistani economy is in deep trouble. The debts of international financial institutions will cause further deterioration. This situation could fuel anti-government feelings. The opponents of the PTI are already decrying the government's economic policy, which according to them has already rendered more than 300,000 people jobless. The government on the other hand claims that it has reduced the current account deficit and created more opportunities for businesses. Some of the government's claims may be true but the bitter reality is that the economy is really suffering.

Many experts believe that Pakistan should stop looking towards Western companies which always prefer large markets and also place a number of conditions before investing in any country. China has already injected a huge investment in Pakistan's economy. It is ready to pump more money into. At the moment it is the only country offering the largest number of scholarships to Pakistani students besides defending Pakistan or at least helping it at the global level.

Islamabad is likely to conclude a free trade agreement with Beijing in the coming weeks or months. We should start planning to take advantage of this agreement, making sure that the free trade deal helps us strengthen our industrial sector that can be instrumental in providing jobs to our rising population.

No economy can flourish if the cost of doing business is high. There are critics who assert that Chinese-installed power plants did not produce cheap electricity. Having constant power supply is not going to solve our problem but such supply should be at a reasonable rate. High cost of energy will make it difficult for us to produce quality products at competitive rates.

The global market is already glutted with Vietnamese, Bangladeshi and other countries products. If our energy cost is high, there is no way to produce textile and other products at competitive rates. Therefore, Beijing should help us produce cheap electricity. On its part, Islamabad needs to ensure that Chinese industries do not affect our manufacturing sector. The government should make efforts to create conditions whereby the companies of the two states can work together without harming one another's interests.

In the past, the Pakistani business community has bemoaned the preferential treatment accorded to Chinese companies. The government should ensure a level playing field but the country's business community must also remember that foreign investment cannot be attracted without incentives. Beijing itself offered more tax relaxation in the 1980s while forcing its own companies to pay higher taxes but with the passage of time Chinese companies learnt to compete with their foreign rivals. Today they are competing with Western companies not only inside China but globally as well. Therefore, Pakistani companies should enhance their capacity instead of complaining every time.

Foreign investment, especially the Chinese one, is badly needed for an economy that has been beset by protests and fears of political instability. If the government is really interested in improving the economy, it must work with China to address the country's economic woes because it is the only state in the region and at the global level that has the potential to help Pakistan steer out of the economic crisis.

The writer is a freelance journalist.

Email: egalitarianism444@gmail. com