Is Pakistan’s Regional Position Improving?
The budget 2021-22 presented by Federal Minister of Finance Shaukat Tarin and the outgoing fiscal year have shown expectations and promising results. As economy has shown exceptional growth of 3.9pc, surpassing the set and expected targets by the government and international financial institution, it seems that the slogans of post 1930s economic depression in the US “happy days are back again” with the ascendancy of Franklin D. Roosevelt, are becoming relevant to many in Pakistan.
Let us dive deep into the facts, figures and local as well as global situation to understand whether this is a real situation and Pakistan has really improved or is it a simulation or flavour of the mouth.
First of all, the growth of 3.9pc is achieved due to great inflows of the remittances, collection of taxes to the new height, halt in influx of imported goods, gearing up of textile and construction industries along with pharmaceuticals and some other industries and disruption of supply chain of regional competitor countries namely, Bangladesh and India, in the wake of destruction brought by Covid-19 into those countries.
Moreover, a total of foreign aid received reached at Rs.87 billion as against Rs.73 billion target showing a surplus; and local as well as foreign funding received amounted to Rs.406 billion.
When we see at the present budget sharing data, we see improvement and increase in budget share of nearly every sector of the country. For example, the Federal Public Sector Development Program budget has increased from Rs.650 billion to Rs.900 billion in the current budget’ Provincial Annual Development Plan has increased from Rs.674 billion to 1.235trillion as compared to the previous year; a sum of Rs.509 billion is kept for infrastructure development and Rs.99 billion are allocated for the construction of dams; Rs.265 billion will be given to transport and communication sector; Rs.43 billion fund for public-private partnership projects; Rs.103 billion for energy sector. 41 billion are allocated to planning and housing’ Rs.28 billion for health care sector, Rs.41 billion for education and billions of rupees for other sectors such as Science and Technology, production, Karachi-Peshawar Mainline (ML1) Railway project and 10 billion Tree Tsunami Program etc. These are, certainly, promising factors for improvement of Pakistan’s economy.
Similarly and fortunately, the global as well as regional atmosphere is in the favour of Pakistan. The major regional development, in this regard, is swift and safe withdrawal of the US and NATO forces from Afghanistan. This process of withdrawal has presented a promising as well as challenging scenario for Pakistan. Pakistan is, beyond doubt, an important country and a regional power. It plays great role in regional politics and keeps a significant influence upon Afghan Taliban with which Americans are dealing and want to make a deal before withdrawing their forces.
Pakistan, in this context, is in benefit as the US needs its help to use its leverage upon Afghan Taliban to sign a sustainable deal so that Afghanistan may not be involved into another prolonged civil war.
Moreover, Americans want the guarantee from Taliban that the US and European countries would not be attacked from insurgents or terrorists from Afghanistan. The US wanted to have a corridor near Afghanistan from where they can monitor Taliban’s activities. In this connection, high level talks and visit of dignitaries took place, but Pakistan outrightly rejected any possibility of providing any base or such facility, due to the latter’s security concerns. The hue and cry among politicians, civil society and public corridors of the country further acted as a hurdle to such a decision. But despite this, Pakistan has got eggs in its basket to deal with the US.
Though the talks between the US and Afghan Taliban had begun with the help of various countries including Pakistan and an initial deal was also signed, the peace process came to a halt as Afghan Taliban did not end their attacks as they consider it their leverage for talks and are not ready to talk to Kabul government, which they call ‘puppet’ of the US.
Here, Pakistan can play a significant role. The country would try its best to come up with long lasting solution to Afghanistan imbroglio, to create peace in Afghanistan and to resolve its issue of terrorism in its tribal areas. Therefore, Pakistan has to play its cards accordingly to secure leverage from the US and its NATO allies with regards to decrease in pressure from financial watch dog-FATF and come out from its Grey List. Pakistan should also aspire to get a better program from the IMF, attract more foreign direct investment, ease travel restriction for Pakistanis and to improve its relations with West.
These developments show that Pakistan and its position at global, regional as well as at local stage is improving. But story does not end here. Pakistan needs to look at the broader spectrum. The country will have to do cost and benefit analysis following the rational actor model, in order to achieve more gains. It is rightly said that this century is not about global politics but it is about global geo-economics. Hence, present global conditions are favorable for Pakistan to improve its economy and regain its lost prestige at the international level.