APD | Pakistan's potential to take-off economically

Author: Prof. Engr. Zamir Ahmed Awan, Sinologist (ex-Diplomat), Editor, Analyst, Non-Resident Fellow of CCG (Center for China and Globalization), National University of Sciences and Technology (NUST), Islamabad, Pakistan. (E-mail: [email protected]).

Although Pakistan's economy is passing through one of its most arduous periods, but struggling hard to revive. In the 1960s and 1970s, the Pakistani economy was at the top in the region. Many countries use to cite the Pakistani model of economic developments. Some regional countries were sending their officals to visit Pakistan and study Pakistani model of rapid developments. Few countries were beneficiaries of Pakistan's experience and economic model.

But since 1979, the invasion of the former USSR into Afghanistan, the whole region became under war and victim of unrest and instability. For almost four decades, the situation in Afghanistan has turned the entire region unstable and insecure. As a result, while the rest of world was developing, this region was deteriorating. Pakistan was the hard hit victim of the Afghan situation. The country faced many cahhlenges like intolerance, extremism, terrorism, drug mafia, and gun culture. The Economic activities halted, education, industry, agriculture every sector faced off-sets. Pakistan lost 80,000 precious lives and an estimated economic loss of US dollars 250 Billion.

However, Pakistan has learned a bitter lesson and initiated measures to revive its economy and focus on economic developments. The Government has devised new policies and incentives to promote the economy and pull the country out of the severe financial crisis.

The Annual Report on Investment Security of China's Belt and Road Construction (2021) was jointly released by China Belt and Road Think Tank Cooperation Alliance, Beijing International Studies University, and other institutions.

The report compiles the fruits of researches on the political, economic, social, cultural, and ecological investment security in countries along the Belt and Road Initiative (BRI).

According to the report, Pakistan has reformed to simplify the process of starting a company and obtaining a construction permit, implementing a series of preferential policies in recent years. It has improved the ease of doing business greatly.

These measures improved its ability to attract foreign investment and strengthened the ease of doing business year by year, making Pakistan one of the world's top 10 economies with the most improved business environment, China Economic Net (CEN) reported.

In terms of political security, the report said that South Asia as a whole is greatly affected by the superpower game. The geopolitics has impacted adversaly.

China, the United States, Russia, Japan, and other countries outside the region have historical ties and practical cooperation here, making the geopolitical environment of South Asia complicated.

The long-running conflict between India and Pakistan has also intensified pressures on political security in the region. The dispute over Kashmir poses a long-standing risk of war.

From the perspective of economic security, Pakistan's economic security scored up by 220% in 2019 compared to 2010, showing an overall growth trend.

The China-Pakistan Economic Corridor (CPEC) has greatly boosted public confidence, stimulated domestic demand, and driven production. Many foreign countries are also investing in Pakistan and initiating new projects.

However, it is worth noting that since 2019, the accelerated marketization of the domestic exchange rate in Pakistan has led to market fluctuations, currency devaluation, sustained inflation, forcing the Government to raise the benchmark interest rate. Besides, the debt burden increased, and the global sovereign rating lowered.

As a matter of fact, Pakistan is rich in agriculture and fertile land. The abundance of water, the suitable moderate climate are ideal for Agriculture in Pakistan. With the introduction of mechanization, new varieties, modern practices are being introduced to boost the agriculture sector further.

Pakistan is blessed with natural resources and an abundance of minerals and minings. The industrial raw material is available domestically at a very reasonable price. Furthermore, the workforce is well trained and qualified. Almost 70% of the whole population is youth under the age of 4o, the most productive age. The total population is around 220 million. The chaeper labor cost makes the industrial products competitive in the international market.

Many Chinese investors are investing in Pakistan liberally and few other countries are also availing the attractive incentive-based policies of Pakistan and shifting their businesses into Pakistan. The future is bright for foreign investors and economic developments in Pakistan. In fact, Pakistan has the potential to take-off economically.

(ASIA PACIFIC DAILY)