Unpacking Pakistan’s geo-economic ambitions
T-Magazine
Pakistani leaders have repeatedly signaled a shift from ‘geopolitics’ to ‘geo-economics’ in recent months
By
ISLAMABAD:
Pakistan’s pivot from ‘geopolitics’ to ‘geo-economics’ came into sharp focus recently as Prime Minister Imran Khan concluded his visit to Uzbekistan. The term has been repeatedly brought up since the beginning of this year – first when the premier visited Sri Lanka in February and then in March, when both the army chief and Pakistan’s foreign minister announced in clear words the country’s developing geo-economic vision for its future.
The Uzbekistan trip, which spanned July 15 and 16, culminated in a slew of agreements across a range of sectors, from trade to culture. Among other things, the two nations agreed to finalise a preferential trade agreement (PTA) within three months to boost bilateral trade volume, which for now is far below potential. But perhaps most the significant
The writer is assistant professor of economics at the Institute of Business Administration, Karachi.
THEY say the road to hell is paved with good intentions. The aphorism is particularly relevant to Pakistan where the existing economic mess is largely of our own making. Politicians promise people stuff they can’t afford. This leads to growing subsidies, rising loans and widening budget deficits. Spurts of such debt-fuelled growth gives people a temporary and false sense of prosperity. However, any operation run on unsustainable cash injections in the form of subsidies, tax breaks or outright bailouts blows up sooner or later.
A case in point is the energy sector riddled with the ever ballooning circular debt. The root cause of the circular debt (unpaid bills of over Rs2.5 trillion on the balance sheets of power sector companies) is the (any) government’s inability to make its own departments and divisions pay for the electricity that they have used (government organisations bei
May 28, 2021
The interest rate policy is the much-awaited occasion for those who have bucks, who want to borrow/return bucks and those who have no bucks at all. The Monetary Policy Committee (MPC) of the State Bank of Pakistan said on Friday that the policy rate would remain at 7% for the next two months.
According to the statement, the MPC has been heartened by an upward revision in the FY21 growth prediction to 3.94 percent since its last meeting in March. “The MPC noted that this confirms the strength of the broad-based economic rebound underway since the start of the fiscal year, on the back of targeted fiscal measures and aggressive monetary stimulus,” it said.
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In this file photo, people buy vegetables from Karachi s Empress Market. Photo by Shahab Nafees/File
Given the rate of inflation that has taken place, Prime Minister Imran Khan has removed unelected technocrat Dr Abdul Hafeez Shaikh and given the additional charge of the finance ministry to Federal Minister for Industries and Production Mohammad Hammad Azhar. He has been tasked “to devise policies according to ground realities of Pakistan and (ensure) the poor get relief.”
The portfolio for finance has been clubbed together with industries and production apparently for better policy coordination and decision-making in changing policy priorities. The ground realities demand the current disconnect between fiscal/ monetary policies and the real economy that produces goods and non-financial services be significantly reduced to improve the fundamentals of the economy. For example, the World Bank experts say that Pakistan exports will dip further this fiscal year.