There was no mention of the PTI’s election promises of revitalising the economy (creating 10 million jobs, building five million houses, transforming FBR, strengthening regional and international trade and enhancing CPEC engagement) at the meeting chaired by the prime minister, or the press talk led by his advisor.
Sheikh sought to reassure the public with “shrinking deficits,” but common people as well as investors want an end to runaway inflation. They want more jobs, improved investment opportunities and material improvements in the lives of ordinary people. It was, therefore, no surprise when during the debate in the National Assembly on Monday, some frustrated treasury members lashed out at their own government over the abnormal increase in gas, electricity and food prices and the overall poor state of the economy.
Compounding the economic woes is the fact that Pakistan is still on the FATF grey list. In the meeting next month, the FATF will decide whether to further extend the grey list denomination or place the country in the category of ‘black’ which will further undermine our national economy. India, of course, has been urging FATF to blacklist Pakistan but it would be naive to expect India to bail us out of the predicament. The prime minister blaming India may be an expedient political slogan after its August 5 annexation of Kashmir to divert public attention, but political sloganeering is no substitute for hard economic decisions.
Pakistan’s woes with the FATF underline the dilemma of an economically impoverished country insisting on punching far above its weight in the international arena
The FATF is multinational and has been consistently asking the government to take a wide range of actions to squeeze non-state actors and terrorists from operating. India has been seeking to place Pakistan in the black list even before the August 5 annexation. The FATF’s ultimate aim is to bring to an end to the activities of non-state actors. With the Taliban resurrecting in erstwhile tribal areas and the interior minister publicly stating that entities like Jamatud Dawa (JuD) have not harmed Pakistan, why blame the FATF or anyone else? Not long ago even friends like China and Saudi Arabia found it difficult to support Pakistan on this issue.
Pakistan’s woes with the FATF underline the dilemma of an economically impoverished country insisting on punching far above its weight in the international arena. It is the outcome of closing eyes to non-state actors seeking to project national power beyond national borders and responsible state functionaries irresponsibly brandishing “pao, pao ke atom bombs.”
In the wake of the August 5 annexation of Kashmir by India, the government also made another critical error of judgment by unilaterally cutting off trade with India without giving serious thought to its pros and cons. It was not India but the PTI government which, taking a u-turn on its manifesto promise of strengthening international and regional trade, completely broke trade relations without considering as to who will benefit from this decision. Why blame anyone else for this?
The PTI government should have preserved the broad-based political consensus on trade with India and the phasing out of the negative list in accordance with a previous cabinet decision. Trade across the LoC is in the interest of Kashmiris on both sides. If we really believe in their well-being and that Kashmiris alone must decide their future, trade across LoC should have been enhanced and streamlined, not undermined.
The decision to stop trade relations with India is a seriously flawed economic decision. Despite serious political issues between them, India and China have strengthened trading partnership that is also serving as a stimulus to resolve political issues.
A powerful lobby opposing trade with India has sought shelter behind industrialists and manufacturers who are wary of competition on the pleas that it will undermine interests of local producers. This is wrong. Imran Khan should have asked his own cabinet ministers Razzak Daud and Dr Isharat Hussain who have consistently opposed this line of reasoning.
Dr Ishrat Hussain has often pointed out in newspaper articles that mechanisms existed in the WTO to protect national interests of consumers, producers and industrialists. Countervailing laws, national tariff laws, anti-dumping laws and duties can be slammed if it was found that certain imports were hurting our producers. Such measures have even been employed against Pakistan by Turkey, despite our pleas.
Dr Ishrat has also long argued that hundreds of thousands of new jobs will be created by selling goods to India, unofficial trade via Dubai will be diverted through official channels earning tax revenues, using national rail and road transport system, improving trade facilitation at the border and liberalizing visa regime will reduce costs of business and spur a process that will enhance peace and security of the region.
That cabinet ministers like Razzak Daud and Dr Ishrat Hussain have not been successful in persuading the PTI government against cutting off trade relations with India strengthens the perception that once again geostrategic considerations have trumped geo-economic considerations. No wonder that Pakistan is in deep economic mess. But there is no use also in blaming others.
The writer is a former senator