Can Pakistan take advantage of the current crisis?

Pakistan’s problems seem complex, but the solution to them is not. The irrationality of Pakistan’s ruling elites is the issue.

Pakistan is in the midst of its most serious crisis since 1971. The political economy has been ripped to shreds through self-inflicted wounds, its international stature is down in the dumps, and if it were listed in the stock market, its stock would be categorized as a penny stock.

Despite the doom and gloom, it is important to know that societies that have experienced more turbulence and destruction have recovered and become influential nations in the international community.

Pakistan’s many challenges do not require rocket science or significant innovation to resolve. There have been years of irrational policies pursued across the political, economic and foreign policy domain. The solution is to change the status quo in foreign policy, economy and governance.

Punching above its weight

Foreign policy is the most important pivot that must be made. Pakistan’s elites have tried to punch above their weight in the international arena, not recognizing that Pakistan is a middle-power. The country’s elites have been led to develop and execute a foreign policy that is fundamentally at odds with the hard and soft power it possesses.

Pakistan must adopt strategic patience in foreign policy, where the country’s elites accept that they will not be able to achieve core foreign policy and strategic goals for a while. The term “hide your strength, bide your time” sums up the country’s foreign policy approach, similar to what Pakistan’s strategic ally China followed for decades. Even if it meant building closer ties with Taiwan, Chinese elites focused on building their domestic economic, technological and human capital capabilities.

Pakistan needs to adopt a pragmatic posture with India and focus on the task at hand at home. Even as it gets overtaken by a far-right Hindutva ideology, the country must make concerted efforts to normalise ties with Delhi. Trade, investment, and integration with India provide significant near-term benefits to Pakistan and while Kashmir remains a core dispute, Pakistan’s elites must recognise that they are not in a position to make headway on this issue given the decline of Pakistan’s own capabilities and

It is breaking the economic status quo.

Pakistan has a policy of strategic patience in foreign policy and must aggressively restructure its economy. If the economic status quo holds, patience on the foreign policy front and a slow and steady normalisation of ties with India are unlikely to yield any positives. Pakistan needs to abandon reckless and irrational economic policies if it is to survive and thrive for 75 years. It means ending the real estate casino economy, getting rid of policies that distort markets, incentivising investment in productive, export oriented sectors, and redirecting resources to benefit the many, not the few.

This process begins first and foremost by eliminating the Dar Peg, reforming the energy sector to reduce electricity costs, and running a macroeconomic framework that seeks to run balanced budgets, even at the expense of low, but sustainable levels of economic growth.

There are two other ways for the military to play a bigger role in the economy: first, we need to reverse the role of the military in the economy, overt and covert. Second, we need to stop buying so many military products and services.

The problem is that most African countries do not have the necessary skills to carry out those projects and therefore need external help.

Oil refineries built on the coast of Gwadar in Pakistan will help the country achieve self-sufficiency in petroleum products, allowing the local people to focus on other sectors of the economy.

The focus needs to be on governance.

Governance improvements are needed in Pakistan’s cities, towns, and villages. Systemic governance is the final pillar of redecentralisation. Pakistan’s elites have tried to centralise power and believe that a strong central government can deliver sustainable growth.

Decentralization is the most effective way to improve outcomes in terms of security, social welfare, and economic development according to evidence from around the world. Pakistan does not have a robust system of local governance where communities make decisions about their own taxes, education, and security.

Decentralization will empower local communities and create competition across the country for better delivery, and it will also create a talent pool in the political domain. In a country that recycles old faces in new parties expecting different results, such a process would bring to the forefront leaders who have experience in governance from the beginning. To most readers, the suggestions are obvious.

It is the whole point. The solution to Pakistan’s problems is quite ordinary. Pakistan’s ruling elites have sustained irrationality. Pakistan will need a miracle over the next 75 years if they ignore obvious solutions.

Reference By Dwan News

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