Daily Times

Pakistan’s Prime Minister, Imran Khan, is touring regional countries these days. He was in Iran a few days ago and now is heading to neighbouring China for the second time since he assumed premiership. PM Khan made to Beijing in November last year where he met with China’s President Xi Jinping; he along with the delegation participated in China International Import Expo (CIIE) as well. During his first visit, despite the government’s excessive claims of getting 6 billion US dollars in concessional loans, the Chinese side, reportedly, only pledge around 2 billion US$. The primary factor behind not getting 6 billion or more was not that the Khan Government did not please the case well. Rather, it was China’s domestic economic considerations grounded in long-term policy making under which the former had already initially pledged to invest 46 billion US$ under China-Pakistan Economic Corridor (CPEC) under the previous Sharif Government. Importantly, just before the July 2018 election, the Chinese side, that includes commercial banks, also poured in ca. 1 billion US$ into Pakistani exchequer.

Thus, it seemed least prudent on part of Beijing to lend excessively to a newly formed government that comparatively has limited commercial, if not strategic, understanding of affairs vis-à-vis its counterpart. Moreover, the Khan Government, owing to either lack of experience or sheer ignorance of foreign policy, generated a controversy over CPEC when the commerce advisor to the prime Minster objected to the very essence of the Corridor and demanded a thorough revision of its terms and conditions. In terms of unintended consequences, this line of reasoning did damage than any benefit to not just CPEC (projects) but also bilateral business dealings. Had this issue not been taken seriously at the state level, it carried the potential to affect bilateral relationship in other areas, too. Thus, the visit of Chief of Army Staff, General Qamar Javed Bajwa, seems to have communicated concrete conviction in further consolidation of China-Pakistan relations commercially, culturally and strategically. Post-Nawaz Sharif, with whom the Chinese side had interacted multiple times- thus, developing a confidence domain- Imran Khan was supposed to fill in the blank through a candid and considerate outlook individually and nationally. One hope that this is the case this time around.

However, currently, the civil government seems to have mired in policy, if not political, crisis which essentially revolves around economic (mis)management. Objectively, the previous PML-N government achieved 5.2 % (revised) GDP growth rate in the fiscal year 2018-19. Shockingly, the GDP growth rate has speedily gown down to around 3.8 % in the first quarter of 2019. Inflation, too, has touched the double-digit. The common man is further burdened with (indirect) taxes. For example, onwards Rs 25 will be deducted on Rs 100 spent mobile top up. The energy demand is increasing gradually, and the rural areas of the country have already started facing long hours of load-shedding.

Pakistan, at the state level, ought to pursue a policy of peaceful interaction and sustained economic cooperation with its neighbours. From this angle, Khan’s visit to Iran and now to China is a step in the right direction

To cope up with this disturbing socioeconomic situation, the Khan Government, instead of investing in improving the tax regime and proving extra-relief to the masses, resorted to external help in terms of aid, loans and, possibly, investment (FDI). The prime minister visit to Saudi Arabia, Iran and, once again, to China are essentially economically oriented. Indubitably, no country would reject FDI. However, reliance on aid and loans has only added to a country’s economic woes than helping it positively. It is obligatory on the current and future government in Pakistan to initiate structural reforms in the means of production without which no sustained development could be realized.

Nevertheless, Pakistan, at the state level, ought to pursue a policy of peaceful interaction and sustained economic cooperation with its neighbours. From this angle, Khan’s visit to Iran and now to China is a step in the right direction. China-Pakistan relations have already achieved a ‘factor of durability’ resulting into CPEC- which has added economic dimension to bilateral relationship. The Corridor is already in practice in terms of completion of more than twenty different projects. However, certain projects have slowed down due to election in Pakistan. There are certain proposed projects such as construction of new Special Economic Zones (SEZs) which need due attention. Also, agriculture cooperation is another area where the Chinese and Pakistani public and private sector can interact for mutual benefits. In addition, the two governments need to work in tandem in furtherance of cultural and educational cooperation. Tourism industry in both the countries can get a boost as a result of relaxation in visa regime and facilitation in transportation and communication. Indeed, it is pertinent for both the countries to, for instance, establish direct air linkage between Shanghai and major commercial urban centers such Lahore, Karachi and Faisalabad; the latter also hosts one of the major proposed Industrial Parks.

Last but not the least, China-Pakistan relations have historically remained military-strategic. The CPEC carries the potential to consolidate economic component in the already sustained trajectory of bilateralism. In today’s increasingly shifting regional alignments along geo-economics, it is but a question of survivability for Pakistan, as a society and state, to initiate major shifts in its ontology that, in my view, got to be oriented in economic regionalism without which it is the weaker states and societies such as ours that will stand as losers in the long run. Lastly, the primary aim of foreign visits, thus, should be to seek foreign investment to boost up domestic market conditions. However, FDI and structural reforms should go hand in hand. Without one, the other will lose out its value and significance.

The writer teaches political economy and philosophy at Shanghai International Studies University
(SISU), Shanghai, China. He is DAAD, FDDI and Fulbright fellow.