Time has come for Pakistan to seriously consider just how long it can let security concerns overshadow commercial and economic interests. For over 60 years, the establishment has reacted to safety concerns by increasingly assuming a security-state posture, often at considerable financial and trade revenue cost. There can be no denying that security issues must take precedence, but unprecedented international economic developments mandate shifting focus to an economic welfare state for the greater benefit of the people as well as the government. The emergence of trading blocs, and subsequent spill-over advantages to member states provide both examples and opportunities for countries like Pakistan.
Presently, proximity and cost-effectiveness has led to the establishment of three giant international trading blocs – Asean, EU and Nafta – reducing the cost of doing business and increasing mutual revenues. Pakistan, too, is part of two major trade associations, ECO and Saarc, a $3 trillion economy even if China is excluded. Even though Pakistan’s current share is less than five per cent either way, it remains the only country with representation in both bodies. And considering our geographic location, by acting as a trade-bridge between the two and opening crucial trade routes connecting them, we can attract major revenue by simply managing the traffic. We can be the bridge through which Central Asian States, Iran, Turkey and Afghanistan can trade with India, Bangladesh and Nepal, materialising unprecedented gains for all concerned, while benefiting Islamabad in the form of transit fees.
Again, such decisions can only be the consequence of bigger concerns that invariably include politics and security. Pakistan’s trade issues with India also incorporate just such matters. But it needs to be noted that engineering a more relaxed trade environment can prove mutually beneficial, and to no small extent. As an example, cement needs in Delhi are better addressed by imports from Lahore than Andhra Pradesh. Similarly, agriculture and commodity prices in Pakistan can be rationalised to a great extent in case of unhindered trade with the eastern neighbour, highlighting the positive impact of increased trade on price rationalisation.
It is also important to understand how India’s large corporations give it added muscle in the international trade environment. The likes of Tata and Reliance can leverage large amounts of capital essential for ambitious investments, hence India’s increasing footprint in the African continent. There is a way to use this advantage for Pakistan’s advantage also, provided political and security concerns are cleared amicably. Pakistan is naturally endowed with huge Thar coal reserves, sitting right next to India. If a mutually beneficial agreement can be reached and targeted investments channeled towards their proper exploitation, both Pakistan and India can share subsequent power generation, marking a new chapter in the political and economic history of the sub continent.
Similarly, Gwadar is another potential goldmine for Pakistan if taken advantage of judiciously. Given the right circumstances, we can invite participation from India, China, Japan and even Turkey to exploit this strategic corridor between the Middle East, Iran, Central Asian Republics and Pakistan, raising it to a position of centrality in international maritime trading.
The benefits of softening the traditional security-centric posture in favour of increased economic, financial and commercial linkages are enormous. But arriving at such an arrangement requires political will in all parties concerned. The proposed shift involves risks, but also brings unprecedented rewards. The deciding factor will be the criteria these states set to define their standing as the international financial system undergoes serious overall transformation. If we remain committed to safeguarding the present position with security issues dictating overall direction, numerous avenues of mutual cooperation will go waste. But if public and official benefit is put at the centre of a new, integrated strategy, chances of graduating into the economic welfare state model are encouraging.
The writer is a former finance minister
