If you think that Pakistan is on the right road, I can respect your opinion, with just one question: Is this based on actual data or just hope? CPEC is a pie in the sky at the moment, the armed forces continue to do their own thing as they always have, and the real economic issues remain largely unaddressed, with no real data to support a conclusion that Pakistan is on the right road, but that is just my view. Please feel free to disagree with it.
There is nothing to disagree with, I enjoy an intelligent discussion. It can be a rarity here sometimes. I respect your views, and you raise important points, in trying to answer, either I will realize your point is more valid than mine, or you will realize, perhaps it's not so bad after all.
When people ask for data, I get a little confused, not by what they mean, but to me, it says they are being overly simplistic and one-sided in their views. I'll try and explain.
Before Brexit, each side bombarded us, the electorate with data, graphs, numbers, studies, experts, and so on. Either Britain was going over the cliff, or it was riding into a beautiful sunset, to await new dawn that will deliver the heavenly luxuries, so only data, maybe not. But, data or information combined with a justifiable explanation about the changes on the ground, which I think is more holistic.
The other side of demand for data, nothing but data, so shall I swear by data, that scares me is the viability and accuracy of such data in developing countries. If we could be fooled by data in a developed country like the UK, by both sides of the argument, I can assure you pure data becomes a lot less relevant in a developing country. Pakistan census before the 2017 one was in 1998, and I remember reading endless stories and articles with data that predicted a gradual decline in population at no point it was expected to be anywhere near the 200 million mark, but you could see it was all rubbish because nothing was being done. Even now if you read the Pew reports on the Pakistan population projections, they look like something out of a fairy tale, they do not make sense. Pakistan's population was 212 million in 2017 and around 230 million now, The data being presented by Pew is all wrong. I can provide details if you wish.
Now, the basic premise is explained, I will try to explain why Pakistan is on the right track. Your jibe or added views on the armed forces are an extra ingredient in the pot, so I will try to leave it unless you insist on an answer. We have to have a reference point otherwise no explanation makes any sense. I think the 1980s broadly are a good reference point, as that is when things started to turn sour.
I do apologize, the above part ended up being longer than I planned. I'll try to keep it consensed, please feel free to ask me to expand on any aspect.
From the 1980s onwards, all you have is bad news, domestically and internationally, combine that with poor governance because I am sure you realize if the state is busy dealing with security matters, other aspects receive less attention. And that is what has been happening ever since. with the massive refugee influx numbering millions. Well over 100,000, some say more, trained and unemployed mujahideen, to the sanctions of the 1990s, and the nuclear program with its own consequences, it has been nothing but negative. that affected economic planning, growth and dried up all the investments.
The war on terror bought with it more funds, that helped to feed consumer-based spending led growth, but it was hollow, because it was short-term and based on money supply. And every story regarding terrorism was being linked to Pakistan, a lot of the embassies started operating out of the country and took much of their essential operations to the Gulf countries, businessmen refused to visit Pakistan so meetings were arranged in the gulf countries, that effects business, airlines refused to fly to Pakistan, Pakistani business actually closed their factories, only to relocate to places like bangladesh, armed forces were very demoralized around the 2008 period, all you have is bad news, bad, bad and worse. Not till around 2015 or so did things gradually start to improve.
The PPP and PMLN both followed consumer-led growth policies because they show growth on paper, and activity in the market, but that's fake growth, sufficient to take them to the next election, without long term planning, no proper growth, and no brick and mortar industries, that create actual jobs, bring in foreign exchange and develop human resource in a country, especially a developing country.
Pakistan tried to build a fence when Musharaf was in power but had to back down because of opposition from the Afghan government and the Americans, Pakistan was not confident enough or strong enough to handle the pressure. the examples are too many and I am sure you can add to them. The fence isn't just important from the security aspect, it also has a purely economic benefit in helping to curb smuggling. Pakistan has a transit trade agreement with Afghanistan that gives them a lot of freedoms, basically, for decades, goods are imported as Afghan goods, but bought back into Pakistan or offload Enroute, because there was an open border, and no proper checking mechanism at the border terminals, that was before. On the Iranian border, something I myself have only recently learned, the cross-border smuggling amounts to nearly 2 billion dollars, it's a shocking figure. When the fence goes up, and border terminals are organized, that's a massive economic benefit to the formal economy and added tax receipts. Plus many other benefits, I won't go into.
Now to remember, from the starting reference point, we are discussing the present and the future, and only the immediate past. The right road and the difference it is making.
Pakistan's armed forces, trained themselves to fight terror head-on and controlled terrorism within the country, without any quantifiable external help, before they were trained for a different fight, it took time but they succeeded. We started building a fence on the Afghan and Iranian borders, the confidence do so comes from internal strength and stability. if it was not there, we would not have built the fence.
Cricket has come back to the country after over a decade, that matters. During the 1990s, I remember the government used to target 500 billion rupees tax collections, just 20 or so years later, the target is nearly 5000 billion rupees and it is nearly being met, that's 10 fold increase in taxation collection. The country used to spend 7% of its GDP on defense, that figure stands around 3% depending on how it is calculated, you can add another 0.3%. That means more resources going to the right places, despite all the challenges, they are still spending a lot less on defense than they used to.
The country had a massive current account deficit just 2 years ago, it has been in a surplus for over 6 months and counting, the first time in decades, they have achieved a current account surplus over continuous months. The issues affecting the country right now, are the ones that were decided during the mess I described above, the circular debt, ill-performing state industries, the government is close to signing a new agreement with the Independent power producers, that will help to bring about a permanent long term reduction of the circular debt. I am in my 40's and have seen all the governments since the 1980s. This is the first government I have seen that is making a massive push for exports, towards the development of brick and mortar industries, the type a developing country actually needs. It has recently bought about massive reforms, in the mortgage sector, which up till now accounted for less than 0.4% of the housing market, in India it is 10%, both are developing countries. The state bank has forced private banks to make available a certain percentage of their funds for mortgages only, so once it gets going this year, it will play a massive role in development.
I am not here to show you results, or denying the existence of issues, but to show the road, the correct road that we are on and the difference from 20 years ago, 10 years ago, and even a few years ago, and the immediate plans in the process.
Regarding CPEC, it is merely a few years old project, because of the coverage, it feels like it has been around forever. I remember a Dubai of 1990, it was a backwater, a dusty place with few modern buildings, they had no security challenges and plenty of oil, it was already on the path to development, still, it took time. CPEC has been only a few years, in active mode, the nodal point is recovering from security challenges, and initial phase was about energy and communication infrastructure, which has been largely completed, the next phase regarding agriculture and industry is underway, give it time.
CPEC is also not just about regional trade, but with a population of 230 million and counting fast, Pakistan needs more ports along its coastline, besides Karachi-based ones. With local development, will come reduce logistics costs, with that, will come reduced cross-regional transportation costs because of the enlarged domestic capacity. there are too many interlinks to mention. But if you look, you can see it happening. Give it till 2030 and judge how successful it has been, it has already crossed the failure benchmark. Because, in a corner of Pakistan where no one went only 5 years ago, people are visiting regularly, it is part of the people's imagination, the mental link has been established, people would think who wants to go there, now people and businesses can see themselves as part of that development, and they are investing, development after is also largely about perceptions and desires.
I will stop here because my mind is skipping over too many things that I want to write, but it keeps getting longer and longer, I honestly tried to keep it short. If you have any pointed issues, please ask and I shall try my best to expand. There is nothing but positives.
