iy READ RIGHT pated ae EDITORIALS “OPINIONS With Modern Vocabulary’s Meanings in English & Urdu & < [ © oa e m™ DAWN, m ALJAZEER m_NEWYORKTIMES m EXPRESS TRIBUNE m THE GUARDIAN m DAILY TIMES m THE WASHINGTON POST ™ THE ECONOMIST ™ The Eurasian Times © EA Read Right Institute / Building #25-4c, Canal Road Muslim Town, Lahoreees e IMPORTANT EDITORIALS Bargain with the future & OPINIONS )E Fanfare? Media attention. als. e525 Seca No. as strong or effective as you think it should be. »3 5S veRTIGHE aiscintion Something bad or undesirable as if it were an honor or achievement.IMPORTANT EDITORIALS & OPINIONS AMID much fanfare, the government last week announced an “economic revival plan” focused on what it calls “untapped potential in key sectors of the economy” to attract foreign direct investment from “friendly countries”. A new body has been created, the Special Investment Facilitation Council, to undertake this task. Any initiative to address the dire economic situation is to be welcomed. But serious measures have to be rooted in reality and not reflect wishful thinking. A policy aim that sidesteps the country’s macroeconomic crisis and deteriorating state of public finances can only be construed as a flight from reality. Patchwork measures taken in isolation of the overall economic environment won't work.IMPORTANT EDITORIALS & OPINIONS The roots of Pakistan’s economic crisis lie in chronic fiscal deficits, responsible for its perpetual balance-of-payments problems, high inflation and macroeconomic instability. What is needed, therefore, is a comprehensive plan to address structural issues and chart a path to sustainable growth that can end the vicious cycle of high budget/ balance-of-payments deficits, rising debt and chronic foreign exchange crises, which have led to repeated IMF bailouts. Unless structural issues are tackled, the country will not escape from the trap of anaemic growth, low savings and investment, high deficits, heavy borrowing, growing indebtedness and soaring inflation. Investment levels only increase in an environment of economic and political certainty and stability, which can build confidence. Uncertainty underminesIMPORTANT EDITORIALS & OPINIONS investment prospects and keeps investors hesitant. It is a predictable and liberal business regulatory framework and commitments of policy continuity by governments that can foster a positive investment climate. No one invests long-term capital if the rules of the game are frequently changed. Moreover, a level playing field for investors is necessary to attract significant investment — something the recent policy announcement fails to do, and therefore marks a step backwards in investment facilitation. The fundamental factors that will determine Pakistan's chances of achieving sustainable economic recovery are political as well as economic. The most important prerequisite isn’t, in fact, economic. It is the quality of the country’s leadership and whether it leads a competent government that sees theIMPORTANT EDITORIALS & OPINIONS significance of structural reform and has the motivation and credibility to take measures, painful in the near term, but which yield enduring dividends in the long run. Pakistan’s economic crises have all been rooted in governance crises, with reform-averse ruling elites almost always seeking pain-free ways to deal with deep-seated economic problems. Lack of leadership and absence of commitment to reform still stand in the way of economic revival. Pakistan isn’t unique in facing a severe economic crisis. Many countries across the world — in Southeast Asia, Latin America and our neighbourhood — faced similar if not worse crises but were able to overcome imposing challenges to bounce back stronger and more resilient. In each case, crises were turned into opportunities.IMPORTANT EDITORIALS & OPINIONS Wrenching structural adjustments, tight fiscal policy and other reform measures were launched by leaderships who were convinced that long-term commitment and consistent policy implementation were essential to move ahead. Leadership is key. But so is an able and knowledgeable team of professionals who can assist the government in formulating and implementing reforms to deal with crises and ensure the country’s transition to sustained economic revival and growth. It is generally agreed that in every successful case of a country that created a better economic future, the quality of professionals who shaped and oversaw the reform process was critical. Again, leadership matters. Leaders select the right team and then inspire it to stay the course and deliver. Institutional strength is also important. That determines how effectively policy measures and reforms are implemented. The secular decline in the quality andIMPORTANT EDITORIALS & OPINIONS capacity of Pakistan’s civil service and its continuing generalist nature are now among the key impediments to policy implementation. An important study commissioned by the World Bank, the Growth Report, examined the experience of countries around the world to draw lessons on what worked to make them economically successful. The report was put together by the Commission on Growth and Development set up by the World Bank, which comprised distinguished members, mostly from the Global South. Though published in 2008 its conclusions remain Just as valid today. Most instructive is the identification of characteristics shared by countries that executed successful growth strategies. They ensured macroeconomic stability, maintained high rates of saving and investment, allowed markets to allocate resources and fully exploited the world economy.IMPORTANT EDITORIALS & OPINIONS Most important, they all had credible and capable governments. Above all, the report points to the understanding by policymakers that “successful development entails a decades-long commitment and a ueerre a bargain between the present and the uture”. In striking such a bargain, both the urgent and important have to be addressed. The urgent is, of course, the immediate financial crisis and the need for comprehensive measures to address that on a durable basis. But the bargain with the future also involves dealing with issues that are just as consequential to economic progress and the country’s future. The most important of these is the coverage and quality of education that is on offer. Economic progress cannot be achieved without a solid educational base. An educated and skilled workforce is what makes the difference between the success or failure of economic development. This requires long-term policy decisions.IMPORTANT EDITORIALS & OPINIONS Yet successive federal governments have washed their hands off education using the pretext of the 18th Constitutional Amendment, which devolved education (other than higher education) to the provinces. Provincial governments for their part accorded it little priority. Decades of neglect and chronic underspending on education have left Pakistan with 22.8 million children out of school. It has earned the country the dubious distinction of having the world’s second highest number of out-of-school children. This has serious ramifications in view of Pakistan’s demographic profile and youth bulge. It’s growing youthful population means that unless the scale and quality of education is expanded young people with no education or skills will face a jobless and hopeless future and a life of poverty. What Pakistan must do to secure a better economic“a Eee future is more than evident — and always has been. But the poverty of leadership and lack of commitment to reform by the country’s political elites have stood in the way of meaningful progress. And it still does. The writer is a former ambassador to the US, UK and UN. Published in Dawn, June 26th, 2023= IMPORTANT EDITORIALS It’s all geopolitics & OPINIONS WAACERSEAH Very angry; enraged. Valsts }Clampadownz Suppression.IMPORTANT EDITORIALS & OPINIONS KICKING off his US visit with a yoga session on the north lawn of the United Nations, Indian Prime Minister Narendra Modi assumed the positions of a cobra, crocodile, and frog. Pakistanis watching the visit unfold last week probably hurled more animal slurs his way. But the visit should leave Pakistan introspective. My compatriots have been incensed at the US-India joint statement calling on Pakistan to do more to counter terrorism, and inviting further FATF scrutiny of our efforts to counter terrorism financing. Similar statements with similar phrasing have been issued by four US administrations to smooth the course of the US-India bilateral relationship. It is the least of our worries. Much has already been written to explain why Modi —IMPORTANT EDITORIALS & OPINIONS once banned from entering the US due to his involvement in the anti-Muslim pogrom in Gujarat — is now feted as America’s great friend. The answer is always geopolitics: India, with its burgeoning population and robust economy, is in America’s eyes the only convincing counterpoint to China in Asia; there is no managing Beijing without befriending New Delhi. And then there’s the Russia angle. With growing urgency to resolve the Ukraine conflict and weaken Russia sufficiently to prevent future such transgressions, Washington needs New Delhi to take a more critical stance vis-a-vis Moscow, historic defence ties notwithstanding. When Great Games are underway, everyone starts to bend the rules. In the US case, that means choosing to largely ignore India’s horrific human rights record with regard to Kashmir and the Indian Muslim population, and the rapid erosion of India’s democratic culture inIMPORTANT EDITORIALS & OPINIONS the form of press censorship and clampdowns on the political opposition. Introspection is needed after Modi’s US visit. So where does this leave Pakistan? We could cry foul at being told (yet again) to clamp down on home-grown militancy. But this is not a way to make friends and influence people (least of all China and Saudi Arabia, long-term allies who discreetly signalled to Pakistan in recent years that the strategy of maintaining state-sponsored ‘assets’ is no longer welcome). Here’s another option: we could initiate a serious rethink of our foreign policy. The major challenge for Islamabad arising out of Modi’s visit is the question of how to balance its ties with Washington and Beijing. We need to maintain our links with both these superpowers: we need the loan rollovers from Beijing, the IMF bailouts from the US. We need China's infrastructure investments, and American ITise IMPORTANT EDITORIALS: & OPINIONS innovations. We do not want to have to choose. Arguably, the visit we should have obsessed over last week was that of US Secretary of State Antony Blinken to China. The trip aimed to ease tensions between the superpowers after the US shot down a Chinese spy plane in February. Some progress was made to stabilise ties and improve communication, but relations soured again when US President Joe Biden referred to China’s president as a “dictator”. Could Pakistan add value to both its allies by playing a productive mediator? Unlikely given our current political meltdown, but these are questions we should be asking. Another 21st-century reality highlighted by Modi’s visit is that unless you have something to offer the world, the world doesn’t care what happens to you. Our long-term strategy of negotiating under pressure has run its course. Rather than agonise over the impressiveIMPORTANT EDITORIALS & OPINIONS defence deals that New Delhi has struck with Washington, let’s consider what else makes India an attractive partner for the US. Geopolitical might aside, Modi arrived in Washington with semi-conductor assembly and other manufacturing capacity, critical minerals, climate finance opportunities and an ambitious space programme. For supporting the diversification of supply chains away from China and facilitating the global green transition, India is receiving the kind of inward investment that many will covet: not just hundreds of millions dollars into manufacturing facilities, but also an agreement to train 60,000 Indian engineers to boost India’s capacity to develop semiconductors. Pakistan will be lost if it doesn’t marry economic policy (our vague premise of doing better on agriculture and IT) with foreign policy and geopolitical realities.IMPORTANT EDITORIALS & OPINIONS Ultimately, it will have to reappraise the cost of premising its foreign policy on enmity with India. Areas for cooperation — food and water security, climate adaptation and mitigation, supply chain integration, access to technology, and even regional stability — are proliferating and need to be explored (perhaps one day in a threesome with Washington too?). Without a more agile approach, Pakistan will only hasten its isolation. The writer is a political and integrity risk analyst. Twitter: @humayusuf Published in Dawn, June 26th, 2023