Hail Mary: Pakistan’s Economic Option

Pakistan can extricate itself from its economic quagmire by learning from China and strengthening private sector trade and business.

pakistan-economic-optionPakistanis consider their friendship with China as higher than the Himalayas and deeper than the Pacific Ocean. Pakistanis get overly excited whenever a Chinese dignitary of even lower governmental hierarchy visits Pakistan. Pakistanis look towards Beijing for trade, for investment, and for financial support.

However, Pakistanis do not learn economics from their close neighbor. This is one prominent reason why successive governments in Islamabad have not been able to effectively get the nation out of an economic quagmire. What should be learned from Panda Nation?

China has had a continuous GDP growth averaging nearly 10% for the past 33 years. China’s foreign exchange reserves rose to a record $3.66 trillion and continue to grow. China’s 2012 exports crossed $2.05 trillion and imports $1.85 trillion. How did all this happen in just over three decades?

China based its strategy on the Beijing Consensus rather than the much-followed Washington Consensus. China’s three-prong strategy was, firstly, no dependence on loans from international development financing institutions; secondly, to focus on home grown policies; and thirdly, all citizens adopting these policies as their own.

In spite of Western accusations of human rights violation, labor exploitation, and artificially maintaining a cheaper currency, the fact is that China transformed from a regimented, state-owned and centralized economy to a liberalized and progressive economic supremo.

The above narrative has been presented as a source of inspiration for Pakistan’s economic managers

After the imposition of Martial Law by General Pervez Musharraf in October 1999, Pakistan witnessed a remarkable period of economic growth for about four years, essentially due to pragmatic and far-sighted economic policies of technocrats in the cabinet. Much of the mess generated by the disastrous policies of nationalization and fiscal mismanagement of the political governments was cleared and the confidence of trade and industry restored. Sadly, the next five years of the Musharraf tenure, plus five years of the Zardari-led regime, and then the past six months of the Nawaz Sharif government, have again been periods when the economy went down in the boondocks.

READ  Politicizing Pakistan's Internally Displaced Persons

The grave economic crisis reflects the misguided thinking of policymakers and is a manifestation of self-interest, blatant corruption, and adherence to quixotic populist schemes and projects. Today, the foreign exchange reserves are technically less than a month’s import bill, the exports are stagnant, the currency has made a nose dive, and the economic team was outside the portals of IMF with a bigger begging bowl.

The country is facing an electricity demand-supply gap of over 5,500 megawatts, while natural gas supply is regularly curtailed for compressed natural gas filling stations, industries, and power plants. Inflation is in double figures, government is printing money 24/7, and the menace of terrorism, extremism, and negative image looms large on the country.

The way out is for the private sector to be assertive and aim for a “grand slam” home run to get the country out of this economic quagmire. The government, however, is lost at sea and has this notion that it can score a touchdown by depending on the Hail Mary option.

Alas, Prime Minister Nawaz Sharif is no Roger Staubach, Quarterback of the Dallas Cowboys, nor is Finance Minister Ishaq Dar, the Wide Receiver Drew Pearson. The Hail Mary option worked for Staubach against the Minnesota Vikings in December 1975. It is not going to work for the Sharif Administration.

Majyd Aziz, a graduate of Ball State University, Muncie, Indiana, is President of a family-owned Group of Companies. He is Former President of Karachi Chamber of Commerce and Industry, Chairman of SME Bank Ltd, Senior Advisor for Pakistan for Transnational Strategy Group based in Washington D.C. and is/was on many Boards and Organizations. He has represented employers at many international forums and has been sponsored five times by US Government for focused visits to USA. He has also done the prestigious National Security Workshop at National Defence University in Islamabad. Twitter: @MajydAziz + Blog: majydaziz.blogspot.com + Email: majydaziz@gmail.com.       

  • K.I.KHAN

    Dear Majyd Aziz, I read your enlighten article with high appreciation and caring regards. YES ! You are correct that we should have studied the new, energising Chinese Way. Once China had only State Enterprises and completly under the total control of its government. Then after the emergence of wise pathway shown by great Chinnese Leader Deng, it has taken a new, meaningful and successful turn in managing its economy, industries, commerce and trade. Though China is totally controlled by the China Communist Party, particualrly regarding politics, state management and policies, but it has given a freerer hand to technocrats, and new enterprenuers to build up its commerce, economic affairs, industrial sector as well as agricultural and animal husbandry also trade, as well as given greater freedom to its various minorities, especially the Chinese Muslim. The way China transformed its State Enterprises into a successfully, public-private partnership as well as allowing more private enterprises is a lesson for us Pakistani particularly and other Asian and African countries as well, Unfortunately, we the Pakistani people and its leaders are more ineresting and committed to non-issues, self gratifications and sanctimonious speeches, sermons and pretenting to be pious, upright and holy. There is a need to Re-awakening our ideals, thoughts and action for a better, safer, blissful results. Good wishes, Yours Fraternally, Khalid Ikramullah Khan.

  • Majyd Aziz

    Dear Khalid Sahib

    Thanx for your views. BTW, today’s DAWN (Pakistan’s leading English newspaper) has a Letter to Editor advising us to adopt the Beijing Consensus rather than the Washington Consensus.Moreover, I received some emails and also two phone calls from people here in Pakistan who did not understand “Hail Mary” and “Grand Slam Home Run”.
    Actually, since this article was written primarily for the American readers who know what these terms mean, i did not “explain” these terms in my piece. And, . . . I am sure every sports lover in USA knows Roger Staubach, for sure. My thanx to Michael Sharnoff for publishing by article.