Introduction:
Pakistan has experienced and is experiencing many crises in terms of economic unsteadiness, structural imbalances, extensive corruption, power collapse, substandard public services, deep-rooted poverty, high inflation, growing unemployment, scarcity of utilizing domestic resources, and debt crisis. The ideals of Allama Iqbal were based on the creation of a pluralistic society but the problems within and historical background never allowed Pakistan to create such a society.
Corrupt leaders and bureaucrats have destroyed the democratic structure of Pakistan and created instability in the country. Since the inception of Pakistan, the country is facing demographic upheaval and economic, political, social, and cultural disruption. Since then, it is looking towards eastern and western sides; with a major focus on the United States (US) and China for political, economic, social, and security reasons. Moreover, Pakistani policymakers wanted to fill their coffers by aligning with the West for trade and financial assistance.
ASEAN:
Pakistan and the
Association of Southeast Asian Nations (ASEAN) share friendly and unmarred
relations and still have not reached the level of maturity to sign a Free Trade
Agreement (FTA). A ray of hope exists as trade and investment between both
parties is elevating. The ASEAN region comprises international, regional, and
sub-regional organizations and companies; enhancing geostrategically and politically.
ASEAN also puts Pakistan as an economic competition but rivalry with India is
the hindrance in its failure. Whereas India, a sister state enjoys stability.
Till now, the leaders could not settle the turbulence and havoc leading the
country to a complete disaster.
Foreign
aid:
In developing countries, foreign aid plays a significant role in the economic growth of the country. Developing countries like Pakistan rely on foreign aid and depend on external sources for economic development. Foreign aid is categorized into grants and low-rate loans. Pakistan started getting foreign aid soon after the independence. After 9/11, Pakistan joined the US War on Terror, and the aid was increased by 7 times. Pakistan's membership of the ASEAN Regional Forum (ARF) is because of its undefeated military power, nuclear capability, and significant position in combating terrorism.
Pakistan’s Vision East Asia Policy faced serious disruption because Pakistan has been one of the greatest victims of terrorism, domestic challenges, and Afghanistan’s issues. Till 2014, Pakistan had received $25 billion in US assistance. This is one of the highest aids received among the weaker states because of its strategic alliance with the US in the War on Terror and its failing status. Pakistan was not able to contribute to economic growth because human resources were not well-developed and institutions could not support development.
The foreign aid did not improve the governance or policy-making strategies. During the last two decades, Pakistan faced devaluation of the rupee. To avoid going back to the International Monetary Fund (IMF), several measures are needed to be implemented to bring the deficit below two percent. Pakistan should fill a gap by becoming a part of the Network Industry and by contributing to the value chains in the marketplace of producing young, dynamic, and middle-income consumers in the East.
In 2019, Pakistan failed to make any progress under the Financial Action Task Force (FATF) and is still included in the grey list. Monetary consolidation and revenue generation should be addressed but unfortunately, they were not. Pakistan’s macroeconomic stability is continuously at risk because of the growing burden of debt service. The government needs to improve institutions, governance, and technology to utilize the resources productively.
Pakistan
needs to get involved in the FTA to avail win-win situation. It will give
concessions to revive the local industries and manufacturers. It will also
create awareness in the business sector to avail new opportunities using
advanced technology to trade with a 0% tariff track.
Pakistan’s
export:
Pakistan’s 60 – 70 percent of the exports came from a handful of products but now they have lost their competitiveness. Pakistan is under increasing debt of loans from the IMF, devaluation of the rupee, payment crisis, and the government struggling to meet the challenges. Dig deeper, Pakistan’s imports are twice the number of its exports. Lack of exports and increased demand for imports are also hampering the economy's growth.
This is also the reason that Pakistan is unable to compete with
foreign firms and heighten productivity. Finance Minister, Asad Umer stated
that despite failure and obscurity painted by opponents, there are golden
opportunities present for Southeast Asian investors to invest in Pakistan
under the umbrella of CPEC. For sustainable economic growth, Southeast Asian
investors should be taken into confidence. It will restore private financial
constraints.
Conclusion:
Pakistani diaspora living in East Asia is an asset. It offers attractive business opportunities in transferring advanced technology and keeps a brotherly relationship with ASEAN members. East Asia enjoys a positive perception in the world so it gives an advantage to the foreign investors to invest in Pakistan.
By luring investment, trade competition, strengthening institutional links, promoting the third level diplomacy, strategic shifting of East-Asian countries towards One Road One Belt (OBOR) the initiative, and broadening ties with the eastern and western countries can enhance Pakistan’s stake.
