Ed­i­tor’s Desk

Enterprise - - Contents -

There has been a lot of spec­u­la­tion about Pak­istan’s in­clu­sion in the ter­ror fi­nanc­ing list is­sued by the Fi­nan­cial Ac­tion Task Force (FATF). Dur­ing re­cent days, many me­dia out­lets re­ported that Pak­istan hasn’t been in­cluded in the grey-list of the FATF while oth­ers re­ported the op­po­site.

Pak­istan did man­age to re­main out of the list of ter­ror-fi­nanc­ing economies ini­tially. China, Saudi Ara­bia and Turkey sup­ported Pak­istan and op­posed the bill that aimed to put Pak­istan in the grey-list. How­ever, the United States pressed on its anti-Pak­istan agenda and man­aged to get an un­prece­dented re-vote on the bill by lob­by­ing countries against Pak­istan.

On the sec­ond vote, China and Saudi Ara­bia de­cided to re­main silent. Turkey, how­ever, did stand by Pak­istan’s side and op­posed the bill again. Saudi Ara­bia backed out first, fol­lowed by Bei­jing. Clearly, China’s even­tual de­ci­sion to with­draw its sup­port was par­tially mo­ti­vated by Is­lam­abad’s in­ac­tion against ter­ror groups op­er­at­ing in the coun­try. China, which has pre­vi­ously pre­ferred to deal with Pak­istan re­gard­ing the lat­ter’s ques­tion­able policy on ter­ror­ism be­hind closed doors, has now started to use re­gional and in­ter­na­tional public fo­rums to in­di­cate its se­ri­ous­ness to the Pak­istani au­thor­i­ties. Pak­istan’s econ­omy will be ad­versely im­pacted fol­low­ing the de­ci­sion by the Fi­nan­cial Ac­tion Task Force (FATF) to put the coun­try in the ‘grey list’ for fail­ing to ful­fill obli­ga­tions to pre­vent ter­ror fi­nanc­ing. The coun­try may also risk a down­grade by mul­ti­lat­eral lenders such as IMF, World Bank, ADB and also a re­duc­tion in risk-rat­ing by Moody’s, S&P and Fitch, ac­cord­ing to an ex­pert on Pak­istan econ­omy

It must also be con­sid­ered that the econ­omy of Pak­istan has not only said to have re­vived but the coun­try has been put on the road to a sus­tained devel­op­ment. This real­ity has also been ac­knowl­edged by a num­ber of in­ter­na­tional rat­ing agen­cies like Moody’s, MCI and global lend­ing in­sti­tu­tions in­clud­ing IMF, World Bank and ADB be­sides in­ter­na­tion­ally renowned me­dia like The Econ­o­mist and Wall Street Jour­nal have also from time to time been ac­knowl­edg­ing the turn­around in the Pak­istan econ­omy, trig­gered by sound man­age­ment.

Man­age­ment of the econ­omy in Pak­istan is un­doubt­edly an ar­du­ous task due to in­ter­na­tional link­ages, de­vel­op­ments on the global level as well as in­ter­nal eco­nomic, so­cial and po­lit­i­cal sit­u­a­tion. When the PML (N) gov­ern­ment was in­stalled in 2013, the econ­omy was in sham­bles with the GDP growth rate hov­er­ing around 3%. Fis­cal deficit stood at 8.8% and in­fla­tion was in dou­ble dig­its, for­eign ex­change re­serves were at $ 6.008 bil­lion. The coun­try faced a de­bil­i­tat­ing en­ergy cri­sis.

The en­ergy cri­sis that is at­trib­ut­able to the neg­li­gence and crim­i­nal in­dif­fer­ence of the gov­ern­ment to the grow­ing en­ergy needs of the coun­try is ham­per­ing progress in the in­dus­trial and agri­cul­tural sec­tors in ad­di­tion to caus­ing dif­fi­cul­ties for mil­lions of house­holds across the coun­try. The gov­ern­ment must give top priority to the devel­op­ment of in­fra­struc­ture. The fact is that all modern growth mod­els in­vari­ably rely on devel­op­ment of in­fra­struc­ture, which is con­sid­ered as an in­dis­pens­able in­gre­di­ent of in­dus­tri­al­iza­tion and eco­nomic growth. The phenom­e­nal eco­nomic pros­per­ity and in­dus­trial devel­op­ment in Asian countries such as China, South Korea, Singapore and Malaysia dur­ing the last three decades is tes­ti­mony of this modern real­ity. The es­tab­lish­ment of Asian In­fra­struc­ture In­vest­ment Bank by China with the ob­jec­tive of devel­op­ment of in­fra­struc­ture in the Asian countries to spur eco­nomic growth is a pointer to that fun­da­men­tal real­ity.

Un­for­tu­nately Pak­istan has failed to achieve rapid in­dus­tri­al­iza­tion due to wrong ap­proaches and poli­cies of the gov­ern­ment. It seems to be di­vorced from the emerg­ing eco­nomic com­pul­sions and vari­ables. What is needed is a prag­matic and vi­sion­ary ap­proach to eco­nomic devel­op­ment through build­ing of nec­es­sary in­fra­struc­ture. When that hap­pens, it will surely act as cat­a­lyst to nudg­ing eco­nomic growth and bring­ing about na­tional in­te­gra­tion.

Pak­istan must have an improved in­fra­struc­ture and com­mu­ni­ca­tion net­work. The CPEC is also about build­ing in­fra­struc­ture which holds the prom­ise of en­abling Pak­istan not only to make up for the lost op­por­tu­ni­ties but also to be­come an eco­nomic power house in the next two decades. The coun­try has a bright eco­nomic fu­ture and it is to be hoped that by 2030 it would join the pres­ti­gious club of G-20 pro­vided the po­lit­i­cal sit­u­a­tion remains sta­ble.

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