Daily Times

I believe what makes a country great is a thought from the past. As an economist, I don’t want everyone to focus on what could make a counter, but how can a country survive and thrive? As I sit here peeping outside the window of my hotel in California, I see the same economic and many social challenges as I see in Pakistan.

This makes me wonder if a multi-billion-dollar economy like the U.S. is struggling, how are political representatives in Pakistan claiming to be out of the current account deficit only weeks after taking office, which was recorded at a whopping 1.45 billion dollars in May 2022, 2.2 times higher than the previous year. This thought is preceded by the news of former Japanese premier Shinzo Abe’s death and his economic legacy.

The great political leader is most commonly regarded as a revolutionist for Japan, who with his economic wit and wisdom turned the tides on the country’s downtrodden system and brought Japan into the mainstream as a global giant on the global map. It was ultimately Abenomics that superseded the political diaspora for Japan. It was his economic brilliance that led to the development of a three-prong strategy aimed at kick-starting economic growth and higher wages through loose monetary policy, fiscal stimulus, and structural economic reforms. His core focus was to reduce red tape and corporate taxes to boost productivity and economic activity in the country. In his famous words, he said, “We should look to the future. rather than worry about the present.” With clarity in economic vision, Japan’s economic growth rose from a doldrum of the past, exports rose, and unemployment dropped to its lowest in decades. Japan also recorded eight consecutive quarters of productive growth-its longest streak in over 30 years.

It was ultimately Abenomics that superseded the political diaspora for Japan.

Whereas in Pakistan, we are caught in the disappointing and dirty political whirlpool that takes us farther away from any reasonable economic decision. The country has never had an economic vision or strategy and continues to rely upon foreign funding and loans. Once again, the way out for Pakistan from its financial troubles is to borrow a whopping Rs. 5.5 trillion from international lenders in the financial year 2020-23 to maintain its foreign reserves, repay loans and balance the current account deficit. From a projection of Rs 3.17 trillion, the new amount is 74% higher than the previous estimate. According to the data, the incumbent government requires 21 billion dollars to repay previous loans, 12 billion dollars to cover the current account deficit; and 8 billion to quickly increase its diminishing foreign exchange reserves. Now the list of lenders for this magnanimous amount is also huge. On top of the borrowers is China, which would lend Pakistan Rs. 744 billion, followed by the IMF with Rs. 588 billion. A projection of Rs. 558 billion from Saudi Arabia is also included.

With no solid action plan to raise money through economic means, Pakistan is heading toward a disastrous situation. On the other hand, the economic sensibility of political leaders, and particularly of Imran Khan, is to continue to propagate and play a blame game, further diverting attention from real economic challenges. It is extremely easy for governments to criticise each other for poor economic performance. However, in over 70 years of history, we have never witnessed a regime with a clear economic vision, a comprehensive strategy, and a well-devised execution plan.

Whenever we read about the economic legacy of Le Keqiang, it teaches us a few significant lessons. In his endeavours as an economist and vice president, he developed the Keqiang Index, which allows Chinese experts to gauge their economy more realistically. The Keqiang index uses railway cargo volume, electricity consumption, and total loans disbursed by banks as the basis for its economic activity, replacing the global GDP model. The economic wisdom Le Keqiang has earned him many titles including 14th ranked in Forbes Magazine’s list of the world’s most powerful people. Now our former prime minister, Mr. Imran Khan, also secured a place in the list of most good-looking men, but that is hardly the comparison one wants to make when discussing political leaders. I would rather take pride in a leader who is known for his reformation, economic restructuring and revival strategies like Shinzo Abe and Le Keqiang.

Today, more than ever, we are caught in financial dilemmas. Even greats like Shinzo Abe faced hardships and failure, but since their strategies were based on sound economic grounds, their countries continued to make progress. Pakistan is currently in a state of inertia where economic progress is not only out of sight but perhaps has not even crossed the minds of so-called economic pundits in the country. If we continue to delay any economic reformation strategy, remittances will continue to decline, the current account deficit will widen, and we will continue to struggle to meet challenges in attracting foreign direct investment.

Therefore, I once again urge the country’s political leadership to give serious consideration to taking technocrats on board for an emergency reformation plan and restructuring based on economic principles and values. If we miss this phase, Pakistan will lose all hopes of economic revival and growth.

The writer is the Foreign Secretary-General for BRI College, China. He tweets @DrHasnain_javed.