Dr Qaisar Rashid
Though Pakistan is a good learner, learning itself is an arduous process. Nevertheless, the year 2022 became able to teach Pakistan several lessons.
One of the major lessons was that the economy had to become the mainstay of Pakistan’s recognition and vitality. Recognition, because Pakistan’s name was equated to a begging bowl: Pakistan knocked at every accessible door to scrape together every bit of alms in the name of foreign financial help. Vitality, because Pakistan found its survival possible only in reviving its economy: Pakistan decided to rely more on geo-economics than geopolitics.
Pakistan learnt the lesson of geo-economics the hard way. After 1991, Pakistan refused to do away with its dream of playing politics contingent on its geographic (strategic) importance. Pakistan thought that several Arab countries would be in need of reaching Central Asia through its land. The thought remained a fallacy. Interestingly, even the Central Asian Republics (CARs) preferred not to reach the Arabian Sea. One reason was the over-reliance of the CARs on Russia and the other reason was Afghanistan’s perpetual internecine conflicts impeding any path to reach the warm water. For one decade (1991-2001), Pakistan kept on playing geopolitics and found no client to move across its land.
In 2001, Pakistan met the downside of its vaunted geographic importance. Though unwillingly, Pakistan became a player in the War on Terror. For two decades (2001-2021), Afghanistan remained mired in a war perpetrated by foreign forces. The period coincided with China’s interests to connect its southwest to the Arabian Sea through Pakistan. Taken together, Pakistan squandered three decades (1991-2021) to realize a simple point: geo-economics was an option better than geopolitics.
The year 2022 was the year of realization of the loss, and turnabout. In appreciating the importance of geo-economics, Pakistan was late by at least three decades. Nevertheless, through National Security Policy 2022, Pakistan expressed its intent to shift its focus from geo-politics to geo-economics. A point was known: any policy alone was insufficient unless it was translated into concrete terms. That is, merely the policy of geo-economics cannot serve the purpose unless the ground is ready. Pakistan got awakened to the reality that, without infrastructure development, neither could it run the wheel of the economy nor could it invite foreign investment. Pakistan learnt the lesson that insufficient infrastructure was an impediment to fulfilling the dream of geo-economics.
In 2018, Pakistan came to know that the era of foreign aid especially from the United States (US) was over. US President Donald Trump suspended $ 1.3 billion in aid unless Pakistan acted against militant safe heavens inside its territory. Trump also refused to offer Pakistan any further economic help on the pretext that, in the past twenty years, the US had provided more than $32 billion in direct support to Pakistan, besides reimbursement through the Coalition Support Fund to compensate for the loss in counter-terrorism operations. In September 2018, Trump also cancelled $ 300 million in military aid to Pakistan for not doing enough against the Haqqani network and the Taliban active on its soil. The situation was indicative of the fact that the US did not like Pakistan’s role in the war on terrorism, nor the way Pakistan served the US interests.
After 2018, spending on the infrastructure slid down to almost negligible. The hybrid regime formula kept Pakistan barren of infrastructure development. Further, the youth were misguided by none other than the country’s institutions. Funds were wasted on nurturing social media teams to fight the cause of Pakistan in a virtual reality, which was far removed from the ground reality. Consequently, in 2022, space for changing the ruling regime emerged to save the dwindling economy. By this time, Pakistan had been feeling the squeeze of the International Monetary Fund (IMF). In March 2022, Pakistan saw the ruling hybrid regime willfully violating the terms of the agreement settled with the IMF. The act of defiance and deception exasperated the IMF. The debt burden made Pakistan compromise its foreign policy, which was short of being independent. Pakistan’s overwhelming reliance on Saudi Arabia for economic gains has offered any country influencing Saudi Arabia to dictate its terms to Pakistan. Almost the same is the situation with China. In April 2022, the hybrid regime foundered an economic crisis. Pakistan learnt the lesson that bankruptcy was fast becoming its fait accompli. Whereas the US was unwilling to rescue it, the IMF was unwilling to spare it. Pakistan’s high expenditure, especially in the non-developmental domain, would become its undoing. Pakistan had to devise a tax regime which could be as in-discriminatory as possible.
In (October) 2022, Pakistan’s major achievement was to come out of the shackles of the grey list of the Financial Action Task Force (FATF). In 2018, the FATF included Pakistan in its grey list because of Pakistan’s deficiencies related to counter-terrorist financing, besides undertaking insufficient counter-terrorist measures. Pakistan complied with all the demands, made necessary legislations, amend the procedures, plugged the loopholes, and threw alleged terrorists behind bars. Pakistan learnt the lesson that the FATF was a force to reckon with. Instead of prevaricating, Pakistan should come clean with its commitment made to the FATF. Further, in the future, stay away from making any militant group its strategic asset.
The year 2022 made one thing apparent: the most sought-after goal of economic self-reliance would remain a far cry. Instead of relying on foreign financial aid from the US, China or Saudi Arabia, Pakistan has to tighten its belt. People have to wean off imports of luxury items. Adapting to frugal living is the way out. Instead of making Pakistan a country of smuggling and hoarding, local products should be produced and used to save foreign exchange.