Jungibaaz
RETIRED MOD
- Joined
- Jul 4, 2010
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I think we should unpack this issue slightly, there are two issues contained within. The first is whether we need external support (Chinese, European, American, GCC etc.), the second is whether we need to maintain cordial relations with the West. It’s an important distinction. Without complicating the question too much, you are right that IMF and FATF are being used against Pakistan as a veritable arm of US foreign policy.
Apart from China, none of the other two countries you mentioned have any substantial economic presence worth seriously leveraging even compared to let’s say Saudi Arabia, let alone the EU, let alone the US. Saudis alone hold more significance to Pakistan than Malaysia, Turkey, Russia combined.
And we are not like Russia, or Iran, etc. We have no oil or gas wealth with which to sustain an economy if we’re shut out of global markets. We have to, for our own sakes, be very pragmatic with international relations. It not only suits us, but bequeathes us to be compelled to have good relations with everyone.
Heck, even China has the most fantastic and extensive trade relations with the US and the EU (current trade war aside). These West and Eastern economic powerhouses are symbiotic, the US buys, China sells, US sells debt, China buys, and on the system goes recycling cash. I can see on my screen even now that China is the second largest holder of US Treasuries after the Fed and Japan.
As for the IMF, the day we don’t require bailouts in general, we’ll say goodbye to the IMF first, as their terms are always the harshest. They are essentially like hospitalising a patient, you want to avoid it if you can and go for less costly or physically damaging treatments. Unfortunately, we’ve had no choice. IK had ambitions about turning down the IMF, but these were ill founded and not properly considered given the very clear direction of the Pakistani economy. He also attempted to go everywhere else for money, China, Saudi, World Bank group, EU institutions, and schemes to bring overseas Pakistani cash - I’m sure it helped, but it was not enough, we went to the IMF anyway... such is our need.
As for the FATF and similar classification, we have no choice at this time but to perform whatever actions are needed to get off it (within reason, and the national interest notwithstanding). It is not enough to trade with China or Turkey, the vast majority of the world’s wealth is in the West, the vast majority of the world’s exports go there. The vast majority of international halls of power, whether that’s the UNSC, or FATF like organisations are dominated by them. We will not change this fact by our defiance of them, we’ll only succeed in making ourselves poorer and outcasts.
Think about it, what ability did China have in the 1970s to influence world affairs and power dynamics when it was poor and it had mass famines where peasants were starving to death? None.
It then built itself up within this international system, became a trade powerhouse and a major player. Now it is able to dictate a lot. It’s still not completely dominant like the US and its allies, but it took time to build this up. Conclusion: you can’t win if you lock yourself out of the game.
My two cents, Pakistan shouldn’t let ego and national mythology dictate statecraft and diplomacy. It requires the utmost pragmatism. We need to take all parties on board with us. We need to be in the confidence of the US, EU, China, GCC, our neighbours, etc.
The Saudi loans, IMF loans etc. Are all indicative of our current inability to say to stand on our own feet financially. They might be fixed (I hope), but that would not absolve us from having to maintain good relations with everyone, and stay off anyone’s bad books as much as possible e.g FATF’s bad books because we’re on the US’ bad books. The national interest itself demands it, we can’t achieve any sublime destiny if we’re constantly starving or on the brink of war.
