US Economic Recovery

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Ghulam Murtaza

The United States, renowned for its resilient economic funda­mentals and promising investment opportunities, has faced significant challenges recently due to the COVID-19 pandem­ic and geopolitical tensions, notably the conflict in Ukraine. The pandemic has left many countries in economic uncertainty, and some have bounced back due to their robust systems and good governance. The American economy has dem­onstrated remarkable strength and stability, reaching a staggering trillion 29, largely due to effective policy re­sponses to the crises and a strong political system. With a population of 335 million, the nation maintained a 3% GDP growth. It also attracted foreign direct investment (FDI) of $10.23 billion in Foreign Direct Investment (FDI) over 2021 and 2023. Factors contributing to the post-COVID-19 GDP growth include fiscal stimulus measures, pent-up consumer demand, and resilient business activity. Despite a trade gap of b$ 70.296, this discrepancy is minor in the context of the $2900 billion economy. Employment trends have also shown improvement, with a decline in unemployment rates, notably dropping from 8.05% in 2020 to 3.04% in 2023. Consumer spending patterns have also rebounded post-pandemic, evidenced by increased retail sales and consump­tion data, signalling economic resilience. The stock market has surged to 4831.2 points, reflecting potent investor confidence. In­flation rates, which stood at 7% in 2021, decreased to 3.2% in 2024. The American economy has remained steadfast despite geopoliti­cal conflicts like the Ukraine war. Certain sectors, including defense, energy, and cybersecurity, have seen heightened investor interest amidst geopolitical tensions, presenting investment opportunities.
Unfortunately, Pakistan is on the list of countries that are struggling post-Covid era. We must evaluate ourselves to know what led some nations to survive after wars and atomic and pan­demic devastations.
The strength of the American economy can be attributed to sev­eral key factors, beginning with effective leadership and estab­lished institutional systems. Good governance forms the bedrock of any state, with strong institutions bolstering the economy’s sta­bility. A robust legal system safeguards property rights, enforces contracts, and fosters fair competition, creating a conducive busi­ness environment that attracts investment and fuels econom­ic growth. The United States has a rich history of nurturing inno­vation and entrepreneurship, evidenced by its leading technology companies, research institutions, and startups. This culture of in­novation drives economic growth by fostering the creation of new products, services, and industries and enhancing efficiency and productivity across various sectors. Moreover, access to capital is facilitated by the nation’s deep and liquid financial markets, includ­ing stock exchanges, bond markets, and venture capital networks. A highly skilled and educated workforce, coupled with world-re­nowned universities and research institutions, ensures a continu­ous influx of talent across various fields, driving innovation, pro­ductivity, and competitiveness. Despite infrastructural challenges, the United States maintains a relatively well-developed infrastruc­ture, including transportation networks, communication systems, and energy infrastructure, supporting economic activity and facili­tating trade and commerce. As a global economic leader, the Unit­ed States influences trade policies, financial regulations, and in­ternational relations, contributing to stability and confidence in global markets, further bolstering its economy. Environmental, so­cial, and governance (ESG) considerations are increasingly shaping investment decisions, with sustainable investing gaining momen­tum among investors. Infrastructure investment catalyzes econom­ic growth and job creation, offering opportunities for investors in sectors such as transportation and renewable energy.
Despite the challenges posed by the pandemic and geopolitical tensions, the United States remains an attractive destination for in­vestors, supported by its resilient economy, favorable market con­ditions, and effective policy responses. While constraints on high growth may exist due to saturation points and diminishing returns, the United States continues to attract global business interests, fu­eled by its superior quality of life compared to China. Bridging the cultural gap between extroverted Chinese investors and comfort-seeking American investors may be achieved by Asian Americans, adept at navigating both cultural dynamics. The real challenge for America is that its private sector is introverted, and its mussels are less developed than the Chinese private sector, which can work in any hostile and freaky areas of the world, followed by maintaining a pace of economic and techno-growth to lead the world.
The writer is the Secretary General of the Pakistan Association of Automotive Parts and Accessories Manufac-turers and a freelance writer