Global economy & foreign policy | By Rizwan Ghani


Global economy & foreign policy

PAKISTAN needs to make its choices on economy and foreign policy with help of latest international developments.

Climate change has opened prospect of Arctic routes. Arctic mission MOSAIC is an example of global science cooperation and international standoff on economy and foreign policy.

Capitalism has failed in UK, EU and America. West is looking for geo-strategic alliances to save national economies, revive stagnant wages and create jobs as Ukraine war resets global economic and foreign policies.

Putin has secured three quick objectives in Ukraine war: Divided EU, derailed NATO and fractured Western economic base including supply chains and banking system.

The alternate banking system, IT, gold (as reserve currency), and digital currency have opened prospects of four long-term objectives: Controlling Arctic, securing Vostok Project (six billion tons of crude oil and 2 trillion cubic meters of gas) with Chinese funding and market.

If Putin gets Gas Union in Central Asia, it will bring following changes: Help link Russia and China to Gulf States.

Make Moscow more powerful in Europe as energy supplier until they transit to alternate energy.

Gas Union will become energy hub in Asia just like Ukraine in Europe. Hopefully, all parties will maintain the balance to avoid Ukraine 2.

The Asia Gas Pivot is going to benefit both energy exporters in Gulf, Iran and consumers including China, CARS, Afghanistan and Pakistan.

Xi’s visit to Saudi Arabia is for energy and infrastructure deals but it is also balancing act with Russia.

The holding of China-Arab summit and China-Gulf Cooperation Council conference will lay the framework for China-Arab relations.

The security and defense agreements will strengthen the alliance.

Islamabad should ask Beijing, Moscow and Riyadh to use diplomacy, trade and technology to stop Europe like NS2 use of terrorism in the region by India for securing regional economy and security. utin has already challenged Indo-Pacific Policy.

He has questioned India’s anti-Asia alliance. World has seen how Ukraine war has undermined EU. It is derailing Europe’s economy, energy security and increasing cost of living.

The rising cost of living is fueling public discontentment seen in rising extreme right politics, governments and anti-immigrant sentiment.

The coup in Germany is a threat to democracy. Modi’s anti-Asia policy is creating Europe like chaos in South West Asia. He is openly sabotaging Asia pivot of ME, China and Russia.

Despite the fact that Quad has rejected India’s maps of the region India is pushing with self-serving agenda against its neighbor on lines of Western Ukraine under Polish rule.

Xi, Putin and Gulf should adopt zero tolerance against India if they expect to see development in South West Asia and ME.

Removal of India from ME, Afghanistan, CARS and Indian Kashmir is first step towards peace and permanent end of terrorism.

There are many lessons in Ukraine war. The four-fold increase in Europe’s energy prices show 27 countries been deprived from cheap Russian energy for vested stakes.

Its impact is clear from €700bn EU energy bailout since start of Ukraine war. Due to poor economies, many European governments will compromise national and public interests.

Pakistan has been victim of similar policies for many decades including access to cheap energy from its neighbors to hollow its economy in slow motion.

It is a challenge, which Pakistan’s foreign policy will have to overcome. The reports of Ukraine attack deep inside Russia have pressurized European nations further to buy Western arms.

Apparently, arms lobby is behind increase in US defense budget. Reportedly, Congress is likely to reject $1Tn defense budget including $250 hike for classified National Defense Strategy by keeping previous year defense spending (12 July 2022, CAP Report).

Scholz visited China to protect interests of Germany. Pakistan should also protect its interests while upholding parliamentary democracy, democratic institutions and rule of law.

Based on these global developments, Pakistan needs self-reliant policies. The focus should be on agriculture, manufacturing (low skill to high skills), IT, real estate and cottage industry.

Peg rupee to gold, adopt digital currency, change currency to end black economy (demonetization in India).

Use domestic consumption based economy (Roosevelt’s New Deal). Turn villages into castles of economy to avoid India’s jobless economic growth. Build water reservoirs for the security of food, water, and energy (saving based economy).

To cut $20bn imports, use Homestead Law (One family, cut crime, Rs450bn police budget, Rs260 social safety program), land reforms, restore cotton and wheat belts from sugar mafia and have government steel mills.

We need local production of trains, planes and heavy machinery. Our universities, technical institutions and diplomacy should ensure that we reproduce 100-year-old technologies locally.

Pakistan can learn from US (Glass-Steagall Act), China and India using IT in financial sector (UPI, NPC) to enact saving based banking reforms, cut exchange rate and foreign debt.

Their National Logistic Policies and Digitized Healthcare Systems. We should make generic medicines to cut cost of healthcare.

All these steps will help to deal with challenges of economy, foreign policy and jobs in global settings.

—The writer is senior political analyst based in Islamabad.