Prudent initiatives

  • A strong economy is also essential for successful diplomacy

In the backdrop of the inherited financial crisis Prime Minster Imran Khan visited China , Saudi Arabia and UAE to seek their help for bailing out the country from the difficult situation. The Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan also visited Pakistan on Sunday. He was given a red carpet welcome at the Nur Khan airbase. Prime Miniser Imran Khan not only received him personally but also drove him to the capital which reflected the warmth and depth of relations between the two countries. UAE has committed to provide $3 billion as a support for balance of payments and also agreed to establish a task force for taking all possible measures to enhance bilateral trade between the two countries giving a new direction to the strategic and all-round ties between the two countries.

UAE has also evinced interest in investing in oil, gas, logistics, ports and construction sectors of Pakistan which require huge financial resources. These sectors have enormous potential for nudging a process of sustained economic development but Pakistan lacks the financial resources to exploit the opportunities. Relations between Pakistan and United Arab Emirates have always been cozy and mutually beneficial and the visit demonstrated once again that there was complete identity of views on various issues, which serves as the basis of long-lasting and trusted friendship.

UAE is one of the leading economic and development partners of Pakistan and has played active role in bailing out the country whenever it faced financial crisis or natural calamities. It is also one of the biggest destinations for foreign exchange remittances to Pakistan. The presence of almost 1.6 million Pakistanis in the UAE is a reflection of the people centric nature of our relations between the two countries. It is also one of the important investors in Pakistan and its investments have helped create jobs and accelerate the pace of socio-economic progress of the country. Through meticulous planning and execution, the two countries can initiate a number of joint ventures in different fields meeting requirements of the two countries and also producing surplus for export to different regions. There are also bright prospects of UAE investing in CPEC economic zones to the mutual advantage.

The visit to Saudi Arabia was also very productive as the country not only provided $6 billion bailout package but also committed to make investments in the oil sector and setting up oil city at Gawadar. Pakistan and Saudi Arabia have enjoyed very cordial relations. Like UAE it is also a great source of foreign remittances.

Similarly prime minister’s visit to China produced very encouraging results. China committed to continue helping Pakistan in boosting the development process in the country and expand the ambit of CPEC to the social sectors. Reportedly besides making increased investments in those sectors it is also extending $2 billion financial support to tide over the current financial crisis. China is a time-tested friend which has made tremendous contribution to development of Pakistan and also enjoys the distinction of strengthening defence capabilities of Pakistan. CPEC has not only taken the relations between the two countries to new heights but has added an element of eternity to them.

The assistance extended by all the three countries will surely help to a great extent in mitigating negative fallout of the current financial crisis as well as enable Pakistan to overcome the difficulties without incurring further burden of loans.  It will also put Pakistan in a strong position to negotiate a possible package with the IMF if needed and avoid the harsh conditions which are usually attached to the bailout packages. It was indeed a very prudent initiative by the PTI government led by Imran Khan to rely on the time-tested friends to winch itself from the perilous economic situation without the burden of more loans which can add to the economic vulnerabilities of the country.

Measures aimed at reducing the budgetary deficit through broadening the tax base and taking appropriate fiscal and monetary initiatives are absolutely imperative

Another hallmark of the strategy adopted by the PTI government in this regard has been to seek investments from all of them. Direct foreign investments are considered as one of the engines of growth which create more jobs and resources required to finance future development plans.

Though the help from friendly countries in times of crisis is welcome but it is not a permanent solution to the economic woes that the country is faced with. Pakistan needs drastic macro-economic reforms and an effective economic strategy that not only reduces reliance on loans and assistance from the friendly countries and the international lending institutions but also nudges the process of sustained economic development in the country.

Measures aimed at reducing the budgetary deficit through broadening the tax base and taking appropriate fiscal and monetary initiatives are absolutely imperative though they might hurt certain sections of the society in the short run. Pakistan is confronted with a very severe economic crisis and the remedy lies in some harsh and painful policy options. Though they might have some political repercussion but they have to be taken now. The health of the economy cannot be made subservient to political considerations. The truth is that the economic melt-down that the country is going through at the moment is a consequence of politically motivated decisions made by successive governments to run the economy. That approach needs to be discarded for good if the country has to move forward.

A strong economy is also essential for successful diplomacy and managing the international affairs with greater aplomb as well as ensuring strong defence capabilities to ward off the dangers to the security of the country. The geo-political situation in the region also necessitates our focus on rectifying the maladies afflicting our economy and initiating a process of turn-around through courageous and prudent economic policies. Strong economy is also a key to promoting well-being of the masses, the fundamental responsibility of the state and the government.