IT seems that Chief of the Army Staff (COAS) General Asim Munir’s grand dialogue with the business community is now gaining momentum giving a hope of economic recovery in the country. It is a good omen that big brasses and caretakers have decided to rescue the falling economy and social fabric. While meeting with representatives of business community, the COAS shared his holistic and comprehensive roadmap of economic recovery in the country, comprising initiating and implementing anti-graft measures with zero-tolerance, country-wide crackdown against smugglers of dollars, essential commodities (sugar, wheat) energy goods (oil, gas), overhauling of SOEs, seeking foreign direct investment from Arab countries (Saudi Arabia, UAE, Kuwait, Qatar), complete political stability, abolishment of black economy and last but not the least, gradual privatization of non-profit state organizations in which newly formed “Special Investment Facilitation Council (SIFC)” would play an important role.
Moreover, formation of various Task Forces’ Mechanism (TFM) would be a value addition to expedite the process of economic recovery. For quick economic recovery in the country, it is suggested that the pinching issue of inflated and manipulated foreign exchange parity management must be resolved through bringing money exchanges under the purview of taxation along with long missing transparency in dollar exchange and interbank rates giving some kind of sensibility, stability and sustainability to business community. In this regard, cancellation of money exchanges of “B category” should be banned in the country. The disparity between the State Bank’s rate and Hundi rate should also be aligned to encourage remittances flow through the SBP.
The smuggling of dollars to Afghanistan must be immediately halted through grand and integrated operations of Pakistan Rangers, FIA, Frontier Constabularies, Coastal Guards, FBR and all associated agencies and departments in the country. The revision of Pak-Afghan Transit Trade should also be considered. There is an urgent need to eradicate black economy which is even bigger than the documented economy through appropriate measures and counter-measures as a last chance. Illegal massive land grabbing, absence and delays of justice, tax evasion, chained corruption and malpractices in the government departments ought to be rectified as soon as possible forming a transparent society and system in the country.
Flaws in NAB amended laws and faulty lines in the society in terms of blind worship of false clergy, feudality, power obsession and threats to common people must be dealt with iron hands. No political compromise or deal may also be pursued to give a last chance to merit, education, indigenous wisdom and modernization in the country. In this way the base of the tax network may also be increased giving some cushion to policy makers to give concessions to common people. Furthermore, every financial transaction must be documented. Sanity should also be prevailed in the power sector and reduction of income and sales tax rates of electricity bills through allowing fuel adjustment charges and their collection during the “winter months” when electricity consumption is usually lower, lessening financial burden stress on common people.
At national level “provincialization and privatization” of Discos, controlling of power theft and line losses and re-negotiation with IPPs at least domestic orientations would also be started to create some important space for end consumers. Moreover, there is an urgent need to include projects of “blue/green hydrogen energy”, solar/wind, lithium and sand batteries under the CPEC Phase-II. “Charter of Economy” must be signed among all political parties and actors to constitutionally limit them to build “One Big Hydro-power Dam”, “Two mega solar/wind projects” and many mini dams in the country. Additionally, approval of any “housing society” throughout the country must be conditional to installation of “mini solar grid” or solar panels.
Fortunately, Pakistan has untapped mineral deposits amounting to about $6 trillion which should be started as soon as possible. But reviving the fragile economy from just 2Ms (minerals & metals) would not provide any short or medium term solutions. Frankly speaking, Pakistan does not have the potential of achieving the US$80 billion in exports as unnecessarily projected by Federal Minister of investments/Textile Dr. Gohar Ejaz. The high cost of doing business, high utility bills, high prices of raw material, lack of innovation, absence of structural modernization, inconsistent fiscal & monetary policies and acute shortage of diversification of exports mix and emerging conflicting geopolitics and geo-strategic compulsions in the region and beyond.
Moreover, his slanted love towards Central Asia is not systematic and substantial. The double landlocked orientations and economic protectionism and absence of direct aviation connections and connectivity means are the few main hurdles to further accelerate volumes of bilateral relations between Pakistan and the CIS. Even all mega projects like Pakistan-Afghanistan-Uzbekistan trans-regional railway, TAPI and CASA-I000 are still non-starter and would not be easily pursued and implemented. In summary, there is an urgent need to redesign the government structure, rationalization of fiscal & monetary policies, balancing of investment and saving policies, people’s friendly industrialization and overhauling of the prevailing rusted bureaucratic system to rescue the country from the clutches of economic depression and social destruction.
The derailed privatization process must be reactivated as soon as possible, especially the debts trapped and state’s liability SOEs in the country. However, social spillover repercussions should also be seriously considered and accordingly resolved. There is an urgent need to promote regionalism with realistic options. There is scope and space for increasing bilateral trade with Azerbaijan (oil, gas, ICT, agriculture, tourism, banking & finance, space sciences, defence production, construction, cement, mining, pharmacy), Kazakhstan (textile, garments, fashion industry, sports goods, IT, aviation, industrialized goods), Uzbekistan (textile, garments, food, agricultural machinery, engineering goods, renewables, transports) and Turkmenistan (energy, chemical industrial cooperation and food etc) which should be explored, untapped and expedited without any cosmetic presentation and personal gratification and glorification of historic ties.
The CPEC Phase-II holds the recipe of quick economic recovery in the country. Re-allocation of high-valued industries, transfer of technologies in solar, wind, lithium, EVs, ICT, agriculture, industrialization and activation of special free economic zones would be value addition in the country. Immediate re-adjustments in socio-economic domains, geopolitical spheres and geo-strategic circulars may rescue the country from circular debts and vicious circles of end-game. Re-orientation of the westernized foreign policy and shifting towards “East” mainly China, ASEAN (Indonesia, Malaysia, Vietnam, & Thailand), and the Middle East, especially after the KSA-Iran peace agreement would be a wise choice.
—The writer is Executive Director, Centre for South Asia & International Studies, Islamabad, regional expert China, BRI & CPEC & senior analyst, world affairs, Pakistan Observer.
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