Opinion piece by M Ziauddin
Pakistan is perhaps one of the few luckiest countries in the world as two of its closest neighbours – China and India – are leading what is called the Asian Century with the northern neighbour having attained the rank of world’s second largest economy and the eastern one the seventh largest.The third closest neighbour immediately across the western border – Iran – is perhaps the world’s second largest oil exporter.And the fourth one on its north-west border -Afghanistan – is brimming with aid dollars having received $57 billion out of $90 billion that were pledged to Kabul between 2002 and 2013.
But instead of benefiting from such an economically and financially vibrant close neighbourhood, Pakistan has preferred to indulge in what can only be described as suicidal economic policies that seem to have the potential to reduce the country, in due course of time, into an economically highly vulnerable one increasing its dependence on external dole.
During the Cold War and since Pakistan’s economy has remained crucially dependent on military and economic assistance from the US, Europe and the oil rich Middle East.We wasted this dole by entering into a losing arms race with India as well as on careless consumption.
Perhaps taking the aid-flows as a never ending bonanza, not only did Pakistan fail to restructure its economy to reduce its dependence on external sources, it also indulged in a counterproductive foreign policy that forced it into isolation in the region except the all important lifeline from China.And the CPEC is just a transit trade route for China and nothing more than a potential source of toll-tax income for Pakistan.
No doubt China is our all weather friend.But China has a trade of over $100 billion with our enemy number one and perhaps would never like to jeopardise this level of trade and economic relations with India just because our friendship with Beijing is deeper than the deepest sea, higher than the Himalayas, sweeter than honey and stronger than the strongest steel.China like most of the economically fast growing countries would perhaps like more to be dictated by geo-economics rather than geopolitics in its inter-state relations.
Similarly, we have let our relations with Afghanistan to be dictated by our relations with India rather than look at the mutually beneficial consequence of developing economic and political relations with Kabul without reference to India.
According to a recent report, Afghanistan, India and Iran have finished negotiating the details of a trilateral transport and a transit pact, leaving Pakistan out of the equation.Afghanistan’s growing disinterest in trading with Pakistan stems from its insistence on including India in any transit trade agreement, and given Pakistan’s refusal to accommodate this, it appears to have decided to move onto Iran.
No one in Pakistan is naïve enough to believe that India does not nurse regional hegemonic intentions but many of us perhaps would like to counter New Delhi’s ambitions using geo-economics rather than geopolitics which has not been such a successful approach as witnessed in the developments that saw India achieving great socio-economic successes as Pakistan slid down to the bottom of the pit in years since Independence.
Geo-economics is the buzz-word in today’s world.Indeed, the world has become totally interdependent economically.More so regionally.Pakistan too can benefit immensely by joining this regional economic convergence.In fact such a close economic interdependence among regional countries is likely to usher in longer lasting peace that would guarantee an honourable and equitable resolution of all bilateral and trilateral disputes as the economic vested interests of all the regional countries would ensure a tension-free business environment.
Meanwhile, let us take a look here at some of the salient features of our closest neighbours’ economies and see what we are missing by isolating ourselves from the regional economy.
China: Its socialist market economy besides being the world’s second largest economy by nominal GDP and is also the world’s largest economy by purchasing power parity.Until 2015 China was the world’s fastest-growing major economy, with growth rates averaging 10% over 30 years.
China is a global hub for manufacturing, and is the largest manufacturing economy in the world as well as the largest exporter of goods in the world.China is also the world’s fastest growing consumer market and second largest importer of goods in the world.China is a net importer of services products.As of 2015 there was talk of a “slowing” Chinese economy, but that referred to a slowing of the rate of economic growth, not to a recession.
India: The economy of India is the third-largest by purchasing power parity. The country is classified as a newly industrialised country with an average growth rate of approximately 7% over the last two decades.
The long-term growth prospective of the Indian economy is positive due healthy savings and investment rates, and increasing integration into the global economy.
India has one of the fastest growing service sectors in the world with an annual growth rate of above 9% since 2001(a 57% share in GDP in 2012-13).India has become a major exporter of IT services.The agricultural sector is the largest employer in India’s economy and ranks second worldwide in farm output. The Industry sector has held a constant share of its economic contribution (26% of GDP in 2013-14).The Indian auto mobile industry is one of the largest in the world with an annual production of 21.48 million vehicles in FY 2013-14.India has $600 billion worth of retail market in 2015 and one of world’s fastest growing E-Commerce markets.
Iran: Iran’s is a mixed and transition economy with a large public sector.Some 60% of the economy is centrally planned.It is dominated by oil and gas production with 10% of the world’s proven oil reserves and 15% of its gas reserves.
It is the world’s eighteenth largest by purchasing power parity (PPP) and twenty-nine by nominal gross domestic product.Oil export revenues enabled Iran to amass well over $100 billion in foreign exchange reserves as of 2010.
Afghanistan: The economy of Afghanistan has improved significantly since 2002 due to the infusion of billions of dollars in international assistance and investments, as well as remittances from Afghan expatriates.The help that came from expatriates and outside investments saw this significant increase when there was more political reliability after the fall of the many terrorist groups in the early 2000s, including the Taliban.
The government of Afghanistan claims that the country holds up to $3 trillion in proven untapped mineral deposits, which could make it one of the richest mining regions on earth.However, due to conflicts, it remains one of the least developed countries in the world, ranking 175th on the United Nations’ Human Development Index.About 35% of its population is unemployed and 36% live below the national poverty line, suffering from shortages of housing, clean drinking water, and electricity.
Source: Business Recorder