Pakistan’s sovereignty in dire straits
From time to time, the issue of asserting sovereignty to conduct independent trade and economic policies to propel progress has surfaced more in the form of rhetoric than substance as low-commodity productivity fails to deliver export-led growth. This has created external sector vulnerabilities, leading to lacklustre inflows of foreign direct investment and loans.
Pakistan needs to build “its own credible reform path, making it worth the investment by external finance,” according to Oxford University’s professor of economic policy Stefan Dercon. He further explains, “It can build a legacy for itself by prioritising development: a legacy that creates a bright economic future for Pakistan.”
Now, the issue of sovereignty has cropped up because Washington has cautioned Pakistan and Iran to be aware of US sanctions while boosting their bilateral economic and trade ties.
Faraz Rahman, Chairman of the Pakistan Business Group, says Pakistan needs to pursue an independent policy to choose foreign trading partners offering better trade terms and pricing. With the fast-emerging multipolar world, global geopolitics, and Pakistan’s deep-seated crisis, exercising state sovereignty has become much more essential for tackling pressing problems and moving with the times. Trade and economic diplomacy alone cannot deliver.
To quote a social scientist, a nation’s people should keep their sovereignty in constant use to improve their livelihood and national productivity themselves step by step. Trade and industry leaders have called for exploring avenues for local currency or barter trade to tap the potential of Pakistan’s bilateral trade with Iran, which is currently targeted at $10 billion by the two neighbours. This would be in keeping with the emerging global trend.
As the US administration intensifies sanctions, risks associated with holding dollar-denominated assets amplify, prompting central banks and policymakers to seek diversification in international financing, says Dr Imran Khalid.
It may be noted that trade sanctions linked to geopolitics, particularly, have stifled free trade to the disadvantage of emerging markets and developing countries. Trade and industry representatives stress the need for completing the long-delayed Iran-Pakistan Gas Pipeline project as, they argue, local industries require cheaper gas to reduce the cost of doing business for producing globally competitive goods and services in order to boost exports.
As a result of US sanctions, the State Bank of Pakistan, data shows official exports to Iran stood at $75,000 in FY23 while official imports were zero. For policymakers to make independent decisions, it is generally suggested that we need a self-reliant economy and political stability. But for that to happen in an era of national and individual self-determination, rights and responsibilities have to be widely redistributed.
A United Nations Development Programme (UNDP) official says, “Any country where half of the population does not have the same opportunity cannot be a prosperous country.”
The findings of the UNDP’s 2023 ‘Insights Report for Pakistan’ showed that the country was on track to achieve only 35pc of the 169 Sustainable Development Goals targets.
It has long been recognised that Pakistan’s economic progress is not socially sustainable, but corrective actions have been delayed, triggering crisis after crisis in rapid escalation.
“Economic survival, let alone revival, can no longer be divorced from political reforms,” says Sakib Sherani. Elaborating, he observes, “Pakistan’s only hope is the democratic displacement of the ruling elite, beginning with giving true voice and participatory representation to the citizens of Pakistan, and respecting the people’s mandate delivered in elections.”
The Senate has submitted a report identifying at least 14 opportunities to strengthen parliament to the InterParliamentary Union, a global body representing national parliaments.