Dr Hasnain Javed
The transformation of New Zealand’s economy is a tale of brilliant economic understanding and strategy. The humble beginnings of this Agri-based economy had the power and the prowess to transform. After experiencing its “wool boom” in the 1950s, New Zealand enjoyed one of the world’s highest standards of living in the world for 70 years. New Zealand into a predominantly service-based sector that today accounts for more than 60 per cent of its GDP. Among the large-scale manufacturing industries are aluminium production, food processing, metal fabrication, and the production of wood and paper products. In 2013, mining, manufacturing, electricity, gas, water, and waste services represented 16.5 per cent of GDP. In the year 2022, high-value services accounted for 26.7 per cent of the GDP. Today, GDP in New Zealand measures at $357,710m in the FY2022, an increase of 5.3 per cent in a year. While the information technology sector is also expanding swiftly.
The essence of New Zealand’s economic growth lies in its strategic approach to it. When the opportunity arose, the economic pandits cashed in on its wool industry, gradually transforming it into a dairy-based industry. With the advent of technology, New Zealand heavily invested in technological transformation making it one of the largest exporters. The country continued to expand its meat industry’s economic reach by making the most of refrigeration technology, making it one of the best meat-producing countries in the world. Today, despite global economic shocks, the country continues to grow steadily, and its people enjoy a great lifestyle. The country
Another great economic success story is “Bangladesh.” I have covered Bangladesh’s export explosive economy at great length in my previous article. The remarkable and fast-paced export story of Bangladesh continues to be a subject of great interest for most economists. Even in times of heightened global unpredictability, the country has a lengthy history of growth and development. Over the past two decades, a robust demographic dividend, robust exports of ready-made garments (RMG), resilient remittance inflows, and stable macroeconomic conditions have supported rapid economic growth. Supported by prudent macroeconomic policies, Bangladesh made a swift recovery from the COVID-19 pandemic.
The Asian Development Bank (ADB) estimates Bangladesh’s economic growth to be around 5.3 per cent in FY2023 and 6.4 per cent in FY2024. The main contributor to this growth is a consistent focus on the textile industry’s growth and development. by controlling the cost of production and systematically investing in increasing the quality of its textile to international standards, Bangladesh has surpassed Pakistan and become an example of great economic success.
Another great economic lesson is the economic survival of Iran. Its economy is comprised of the hydrocarbon, agricultural, and service sectors, as well as a substantial state presence in manufacturing and financial services. Iran ranks second for natural gas reserves and fourth for confirmed crude oil reserves worldwide, making it somewhat reliant on international oil trade. However, the main contributor to its economic survival in the face of international sanctions is its “Three pillars plan.” It focused on the development of a resilient economy, the advancement of science and technology, and the promotion of cultural excellence. Reforming state-owned enterprises and the financial and banking sectors, as well as allocating and managing hydrocarbon revenues, were among its top priorities. The plan anticipated an eight per cent annual economic expansion.
The point of explaining these astonishing economic stories is to highlight the fact that great economies became great because of three main factors. Firstly, strategic direction is based on a clear vision and clarity on its objectives. Secondly, a great reliance on the country’s natural resources, growth and stability of its domestic industries. Thirdly, the development and execution of a great regional collaborative strategy to ensure an open economy and more trading opportunities. Fourthly, sound import and export strategies were an economic pivot in these countries’ growth and survival.
In the case of Pakistan where the country continues to suffer from its fall of democracy, where we are unable to pay its deficit and the reliance on IMF will further dent the economy, we need to resolve to a smarter approach to deal with the current financial crisis. The policymakers need to focus on the cause and effect in case there is no IMF. On the diplomatic front, we need to engage potential trading partners and promote our high-quality agri products such as fruits, vegetables, and meat. Pakistan must also divert its attention to creating a comprehensive and collaborative environment between critical national working bodies such as the Planning Division, Board Office, Foreign Office, Chambers of Commerce and Commercial counsellors all working towards a common economic goal. Our survival also relies on our ability to attract Foreign Direct Investment. Our authorities need to ensure one-window operations from land acquisition to security, gas, and electricity, and policies and procedures that accommodate the quick execution of business and introduction of products and services in the local market.
Further, our great dependency on friendly countries will continue to cripple our ability to stand and rely on our feet. State-Owned Enterprises are a white elephant causing financial loss of billions to the state. The latest IMF condition is the rationalization of our national budget which further clarifies our weakened negotiation power with international lending bodies. What will most likely happen are a bunch of announcements with no or poor execution.
Global inflation, supply-side shocks, and the politics of Economic BLOCs are a reality that should further encourage Pakistan toward economic independence and plan for its survival amidst war and political and economic deterioration on national and international levels.