Where Does Pakistan’s Economy Stand?
“We can easily forgive a child who is afraid of the dark: the real tragedy of life is when men are afraid of the light.”
Plato
Dr. Ruskin described “economy” as the bastard science of darkness (Ruskin, 2000). He developed the idea of the economic man—a material thought that now governs how the world views its activities, always in search of one’s own national interest, regardless of the cost to the interests of others (Kenton, 2022). Walter Block further expanded on the idea of an economically driven world and went on to explain that this science of economics led to a “brutish” world where morality was not a priority (Block, 1985).
Rand, in its analytical paper “The Future of Warfare in 2030,” explains how wars are not only fought because of economic objectives to acquire what one does not have from those who do, but goes on to establish that the economy itself could now be an instrument of war (Rand Corporation, 2020). This is especially so now as wars become more total as opposed to being limited in application, and the masses themselves become targets. Hunger and deprivation are the roads to coercing a political decision in the civilized world today (Bush, 1996).
So as the economy begins to matter more and more, Pakistan is in dire condition as far as its economy is concerned. With a debt-to-GDP ratio of 84.8% ($278 billion in 2019), Pakistan is trapped in a vicious cycle where there is limited possibility of the economy ever improving if policies continue in the same manner and method. It is obstinately sticking to the same plan over and over again, hoping for a change—a sign of insanity, as concluded by Albert Einstein.
The GDP has to grow substantially to keep up with the debt repayment and retirement of external and internal dues while ensuring adequate economic growth at the same time. New solutions are urgently needed to address the existential economic problems that limit the space for any economic recovery. This recovery is essential for developing an autonomous structure to make independent fiscal decisions in the interest of the people, the sovereignty to make long-term financial plans in the interest of the state, and the ability to exercise the liberty of political choices as an independent nation.
Impact of Reputation on the Economic Growth of Pakistan
Sustainable growth is defined in financial terms as the maximum growth rate a company can sustain without having to increase financial leverage. These leverages are through debt and equity. The first is related to loans, and the second to shareholders. This theory can be expanded up to the national level as well where loans are getting more difficult as well as expensive to acquire and there are no significant international shareholders in terms of joint ventures or direct foreign investment (FDI).
Yet while one talks of best practices and future growth, it implies, in all sincerity, that one should somehow manage to meet one’s current needs without compromising the needs of future generations. This is not what is happening, and with each passing day, the present is criminally trespassing on the sustainability of the future. Someone needs to not only take this into account but also put a stop to it. Red lines need to be defined, and limits must be established.
Yet to discuss economic growth and sustainable development in a vacuum by itself makes no sense. One cannot make any recommendations that are oblivious to the influence and role of the government, its policies, and its interventions. The first and foremost step would be political stability, certainty, continuity, and security. Without such stability, economic activity becomes disorganized, and unpredictable and the risks are too high for any sort of individual, institutional, or foreign investment.
The second issue is that of an effective foreign policy to establish a national standing amongst the comity of nations vis-à-vis trade, corporate undertakings, and commercial activities. Business evolving around inter-state enterprises, joint ventures, and foreign investments, both incoming as well as outgoing, cannot be done in isolation. A sensible foreign policy is a must to integrate the nation’s fiscal endeavors into the global economic process and developments. Yet the current scenario is characterized by the poor international image of the country and its low ranking at the global level in almost all fields of governance.
Pakistan has a bad reputation and lacks credibility for investors, as reflected in some of the more pronounced indicators, amongst many others: it stands 129 out of 165 in the sustainability index, 140th in corruption out of 180 countries, and the judiciary ranks 130 out of 139 in judicial propriety (Hussain, 2022). These matters must improve and governance needs to develop a credible face; in fact, as a nation in general and a society in particular, there is a need to get out of the denial where society seems to remain suspended in time, seeing no wrong in itself, promoting false pretenses of a superior culture with an overstated and hyperbolic perception of its history.
Patriotism is not about bragging that one’s country is the best only because one was born in it; there are other far more measurable and defined parameters that must come into the equation before one can claim any level of ranking in any field. Begging the world for funds to survive while at the same time projecting national pride is a big contradiction.
However, since this paper is about economic reforms, it shall restrict itself to those areas only that are relevant to economic growth, but with total acknowledgment of the fact that political and administrative reforms must also be undertaken for which a separate paper/papers is needed. Such reforms are essential to making any prospect of economic growth and development a realistic possibility. So keeping this in mind, some of the most salient aspects, considered essential for economic growth only and focusing on the national economy only, are described in the following paragraphs.
Connecting Human Resources & the Economic Condition of Pakistan
To address the future economic condition of Pakistan, it is of utmost importance to first recognize and then address the greatest liability that is impinging on growth. This dubious distinction, uncontested and unchallenged can be safely attributed to the population—its current volume and growth, and then the quality of human resources that this country is churning out. The current estimates are around 240 million (“Pakistan Population,” 2024). It is growing at 2% annually, and by the year 2050, it is estimated to be 310 million.
Skilled vs Unskilled Labour
Pakistan ranks 5th in the world by population. This impacts directly on food security and water resources. Living space, pollution, and the environment all take a hit because of such a mass of humanity. Yet, while taking a look at the annual budget, one of the major contributors to the national income lies in foreign remittances. This was $31.2 billion for 2021-2022, growing by 6% annually and may even increase to 8% (Ahmed, 2022). Remittances at present are estimated to be about 9% of total GDP, as opposed to an international average of 5%.
However, this is mostly unskilled labour that largely works in the Middle East, undertaking menial jobs, and who wallow at the lowest rung of employment within this region. One must be realistic and come to terms with the fact that a large part of the population in the country will never acquire the literacy needed to find a white-collar job and as such, qualifying for a blue-collar job must become a focus and be a desirable goal to sustain an average family financially.
In fact, one finds it difficult to define any national policy that can differentiate between literacy and education, with the former relating to a defined level of certified qualification (leading to a white-collar job) and the latter more related to technical skills integrated into the wisdom of the street and conforming to the local way of life (leading to a blue-collar job). There would be a positive impact on the overall population as well as be in Pakistan’s economic interest if a substantial part of the focus was to shift towards technical qualifications and expertise leading to blue-collar employment.
Technical skills must be developed, and standards must be established through recognized international certification. The country needs to set up globally recognized polytechnic institutes with third-party accreditation that would allow Pakistan to export skilled labour instead of unskilled labour all over the world. Preparing skilled labour in recognized established institutes, technically trained as plumbers, electricians, vehicle mechanics, masons, builders, etc. would contribute immensely towards the GDP growth as well as towards nation-building.
If these institutions are set up based on international affiliations and are recognized and certified by the European, Australian, American, Canadian, and British guilds, etc., employment for the younger populace could be easily found and facilitated globally. Considering that the projected population in Pakistan in 2050 will be close to 310 million people, such an endeavour where young people may be facilitated for gainful employment the world over, is an extremely important aspect of economic growth and development of the human resources.
Also, standards within the country would improve, such as in construction skills, mechanics, and technicians who currently learn their respective trades through apprenticeships taught by father-to-son or other such family connections. All these recommendations mentioned in no way impinge on or imply that methods and means to contain and limit population growth at some defined level should not be undertaken concurrently and with equal enthusiasm. Maintaining a large population does not make for a sustainable Pakistan in the future, given the obvious impact it has on the natural resources.
Incompatible Education
However, no nation can go forward in this techno-savvy world without imparting compatible education to its future generations at the high-end level, allowing them an opportunity to compete on the global plane. After all, as was recognized by Georges Danton in 1792, “After bread, education is the first need of the people.” The expertise within the country lacks competence and continues to drive the education system based on self-defined syllabi and curricula that are regressive in nature and limited in scope.
With global developments and outlook in digitization, artificial intelligence, robotics, and disruptive technologies, Pakistan has a lot of catching up to do. The present curriculum, method, and medium are all outdated and at times, can even be obscure. Future generations are inadvertently denied building intellectual capacities or acquiring progressive knowledge because of criminal indifference towards global standards and internationally compatible education systems. Pakistan’s youth need to keep abreast of and survive in a world that is making headway, in leaps and bounds, in the realms of science and technology.
A generation stands to suffer and is held back on account of the lack of intellectual competence compatible with international standards, aggravated by a heavy madrassa influence corrupting contemporary education values. There is a dire need to get out of the paralysis of denial and face reality as it stares us all in the face. The “single national curriculum” may address the needs of people with limited language skills and poor awareness but it also subsidizes mediocrity and lowers standards to accommodate those who cannot rise to higher standards (Lal, 2021).
The fatwa banning the printing press in Turkey in the 15th century ensured that Islamic civilisation would never rise or ever again have a competitive edge over Western knowledge in sciences, medicine, and art (K.A., 2009). Similarly, it appears, the government is bent on repeating the folly of yesteryear. This is a self-inflicted wound caused by an ignorant and politically self-serving administration in search of cheap popularity, playing to an ignorant gallery.
There are only six universal languages in the world which all education, scientific developments, medical progress, business, etc. evolve around (“Official Languages,” n.d.). These languages are universal only because they acquired recognition and global respect as mediums of communication in the expansion and illustration of sciences, literature, general knowledge, the development of civilization, social and civic sciences, and as functional financial transactions and practices. They represent developed societies that were emancipated and liberated allowing for large-scale global developments.
Pakistani society does not have any such pretensions or aspirations, being indifferent to global progress in every field. Pakistani schools and colleges never promoted modern scientific study. because of this, we suffer a backward society, drowning in superstition, magic, divinity, and extremism. The nation never evolved and remained suspended in history with a false and exaggerated account of its past. Now to expect that the international community will respect or recognize Urdu as a useful or functional language is a wishful thought.
If the nation continues to obstinately stick to this medium, it will never allow Pakistan’s younger generation to go global in thought or live an enlightened and progressive life. Generations will remain hostage to what is considered tradition, custom, and local convention. Pilots cannot fly and no plane can be operated by a crew that does not know the international lingua franca. So whereas it is alright to have a high national spirit and display emotional patriotism, these values must never be blind or lead to a dead-end.
Urdu should be promoted and taught as a subject, but the medium of education must be English to give everyone an equal opportunity to go for higher education anywhere in the world. Let Pakistani society grow, first contribute to civilization, and then be recognized as a partner in a free and liberated world before one can expect one’s language to become an instrument of custom, progress, learning, and wisdom. In fact, as it is now, a basic right is being denied to future generations by politicizing the education system and justifying its current mediocre standards through ideological rhetoric.
There is a need to immediately acquire internationally recognized and acceptable syllabi and programmes. All exams must be third-party evaluated, allowing for internationally recognized certification. This is the right way to empower the youth as they are sent forth into the world to represent their country—not slogans without substance.
Agriculture: A Key to Improving the Economic Condition of Pakistan
The largest sector of our economy rests in agriculture, which contributes only 24% to the GDP but involves about 65% of the total population (Farooq, 2022). Even the largest manufacturing industry, which is cotton textiles, is agriculture-based (“Pakistan Industry,” n.d.). There is a need to introduce reforms that include crop management, fertilizer and pesticide application, better irrigation techniques, and improved farm practices. The soil is devoid of NPK (nitrogen, phosphate, and potassium), and needs to be revitalized. There is a need for radical reforms to improve farming practices. As an indicator of its poor economic condition, today, Pakistan has the lowest yields in every major crop when seen against any international data.
Pasteurization of milk is the need of the hour to control disease and waste. Such plants can be set up centrally in all regions where milk can be easily brought in. Unfortunately, the parliament did not find it within itself to pass the relevant law for the pasteurization of milk and succumbed to the pressures of the local milk vendors who sell polluted milk (Najam, 2022). This is now leading to stunted growth in children.
Meat processing is ad hoc and must also be properly regulated to translate it into economic gains for Pakistan, particularly amidst the state’s current condition. The type of feed to the animals must be properly defined for quality and type and should then be suitably regulated and supervised. If proper regulation is undertaken and “foot-and-mouth” disease eradicated, something that Pakistan is inflicted with, it would allow the export of meat. These measures would allow rural areas to generate a better income.
The migration from rural areas to urban areas is causing a saturation of humanity in the cities and overloading services in them (Hamid, n.d.). Rural life must be improved all around to discourage such migration. The emancipation of women would help change the way of life in rural areas. Let women lead in the poultry and livestock industries through soft loans. Better schools, sports, and scholarships for children could assist in improving their way of life. Some important steps to improving food security are suggested as follows:
- How fertilizer is manufactured and applied needs to be reconsidered. Fertilizers must be blended after soil analysis on the farms. Specific areas have specific needs that need to be customized. An atlas has already been structured on these lines, highlighting the peculiarities of the soil from region to region. Fertilizer manufacturers now need to integrate farmers from every region. Mobile labs need to be deployed to ascertain the type of soil and its needs in every area. Modern blenders mixing suitable NPK (nitrogen, phosphate, potassium) ratios in accordance with the needs of the land should be done on the spot, and only then should companies sell this customized fertilizer to the farmer. This experiment was done, and a 30% increase in cotton yields was observed. This could ultimately improve the economic condition of Pakistan.
- Nutrients need to be examined, such as sulfur, zinc, etc. These are catalysts to release the NPK at the right time for the plant.
- Drone technology with suitable AI must be introduced to predict, assess, and deal with pests. Controlled pesticides allow for a healthier plant and enhance yields while saving resources and money.
- Water management needs to be controlled and regulated. New best practices using drip and capillary irrigation must be introduced rather than flood irrigation, as is the common practice today.
- There is a lot of talk about constructing dams to store water, yet no one ever stops for a moment to consider how the water resource was depleted—the existing sub-surface aquifer. One may be able to store more water with more dams, but without appropriate regulation, one may misuse that stored water as well. This is not a sustainable practice.
- A policy to regulate regional crop management must be structured. This should define cash crops and food crops from region to region, keeping in mind the climate, water resources, and the agricultural-based industry. A marketing strategy to include exports can then be based on a properly coordinated plan.
- The burning of roots after the harvest of rice and sugarcane is a horrible practice and must be banned. The roots can be easily converted into compost using an appropriate rotor-weightier plough. It will allow for healthier soil.
- Tree plantation and afforestation must be undertaken as a project under a national emergency. Pakistan had 6% forests in 1947 and now has only 3%, as opposed to international standards of 25% (Islam, 2011). The overall land cannot sustain such destructive practices.
Encouraging the Private Sector
Pakistan’s greatest burden is, of course, debt repayment. This implies taking another look at the loans taken out by the government and how best to retire them. To facilitate debt repayment, steps must be taken to offload many of the state-owned enterprises (SOEs), now amounting to 200 enterprises, which according to the World Bank are liabilities. A study conducted over the last 5 years reveals that these SOEs show a consistent liability towards the GDP of about 12%–18%, which in absolute terms amounts to Rs429 billion (Amin, 2021).
In any case, the government of Pakistan must not be in the business of doing business if its current economic condition is anything to go by. Instead, it should only be coordinating, facilitating, and defining strategic goals, and economic objectives, and providing focus and direction that then must be met by the private sector. This is as opposed to the government, which likes to get into corporate activity, which, in turn, creates serious imbalances in the national corporate structure.
As it stands today, there is overregulation, which leads to red-tapism and corruption. Illogical laws, rules, and regulations are stipulated, and just to illustrate a few, you have the GIDC which was a black law (“GIDC Collection Remains as Elusive as Ever,” 2022) that was implemented, and the axle-load law which was a good law but could not be implemented (Minhas, 2019).
The former blackmailed industry into providing funds without setting up the promised infrastructure, and the latter allows trucks to ply the roads tearing up the surface. This further burdens the government with substantial revenue spent on the repair and maintenance of these roads without any reciprocal payment made by the trucks based on the loads that they subject them to. Hence, it’s counterproductive for the economic condition of Pakistan.
Unnecessary regulation and government oversight discourage investment and growth, slowing down development significantly. Services are about choices available to clients. Potential clients should be able to choose between one or the other on the basis of cost, quality, availability, and reliability. Privatization of the energy sector, its production, and distribution would go a long way in developing more efficiency and a competitive environment encouraging growth.
Developing alternative energy is another goal that should be implemented in letter and spirit, but through the private sector. Alternative energy, electric transportation, public charging stations, and recycled resources are where the future lies. Such measures would generate more revenue and save expenses. Line losses can be substantially reduced by investing in HVDC (high-velocity direct current) transmission lines allowing more energy to the consumers on competitive plans and payment methods.
Energy must be harnessed with efficiency regardless of whether it is fossil-based or alternative energy. The national grid must have flexibility, depth, and capacity to supply energy to all parts of the country under all circumstances since life must never come to a standstill from want of an infrastructural collapse or disruption.
Fixed Tax in a Cashless Economy
“I shall easily show that it is impossible to tax further, ruinous to be always borrowing and not enough to confine ourselves to measures of economy.”
Charles Calonne, 1887
The tax system is one of the greatest hurdles to the development and progress of the economic condition of Pakistan, if not properly figured out. One cannot tax oneself into being a rich state. As it stands, the economy of Pakistan is skewed; it is unfair since there are huge amounts of regressive taxes that are borne equally by the rich as well as the poor. The tax collection system is extremely narrow-based and resource-limited to very few with only 1.2% (2.8 million people) registered as taxpayers. It fosters corrupt practices, which is why it is stacked against growth, development, and expansion—and against improving the economic condition of Pakistan (Bukhari et al., 2022).
An out-of-box solution is being suggested but it must be examined by experts as well as the government, for its efficacy and functionality and after having been suitably modified to accommodate any necessary changes, must be adopted as soon as possible. With irreversible damage already done to the national economy, the stage is now far past, to expect that conventional or regular interventions may make any positive difference.
So, it is time for radically different solutions to be structured and tested to take Pakistan out of the present, disastrous economic condition. The one being suggested is to introduce a relatively tax-free economy in general, yet, a fixed-tax system for all financial transactions in a newly structured digital fiscal system. This will immediately control inflation, lower prices, improve the economic condition of Pakistan and allow people/entities and institutions better opportunities for investment in industry, manufacturing, and production. This already exists as a system in some countries in the world today (Maverick, 2022).
CPEC, which is now coming of age, would become a haven for all kinds of investments – local and foreign – accelerating industrial growth, manufacturing, and production, astride all three CPEC corridors. This is an obvious road to economic development, a huge employment boom, generating much more financial activity and large financial transactions (taxable) as well as exports. A government’s views on the economy were amply described by Ronald Reagan.
“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan, August 15, 1986
So, we desperately need to get out of conventional governance of the economy, as it is today, which in fact is stifling and discourages growth. Since the government would now have no visible source of income and revenue, it is suggested that a fixed tax be imposed on all financial transactions, the efficacy of which is explained below. Parallel to such a radical step, that of introducing a relatively tax-less society, would also be to gradually remove denominations of paper money from circulation and to enforce all financial transactions through digital banking.
A fixed percentage of all banking transactions should be taxed, and as such, everyone would pay tax compatible with the expenditures they undertake or their respective capacities. The rich with a greater expenditure would pay more than the poor, who have a limited spending spectrum. The figures determining revenue generated by the system being proposed need to be properly evaluated, and the efficacy of the method needs to be validated by qualified economists.
However, to establish some benchmarks to carry the argument forward, World Bank figures for Pakistan’s per capita GDP have been taken as a benchmark from which the reasoning has been further developed. The work has been attempted on the lower end of the value spectrum so as not to exaggerate the resultant figures. With a total population estimated to reach 240 million people and using international figures of the per capita GDP (i.e., $1,500/-) as a benchmark, the annual revenue of the Pakistani government exceeds $18 billion after applying 5% tax deductions to it.
When commercial and corporate transactions are added to this, which actually account for far more in revenue than per capita GDP, it is assumed the overall revenue would at least go up by another 100%, making it around 36 billion rupees. This is as opposed to the 35 billion rupees recorded for June 2022 (“FBR Exceeds Revenue Target,” 2024). Today, with 17% indirect taxes, individuals who pay taxes pay about $255/- annually, on essential commodities in indirect taxes at the very least, but in the proposed system, one would be paying out only $75/-, which is 300% less than what it is now.
By introducing a digital economic system that is cashless, another benefit would be securing the informal economy. At present, the undocumented economy is almost as big as the formal economy and has been estimated to be around 35.7%, which represents approximately $450 billion at GDP PPP (purchasing power parity) levels (“Pakistan’s Informal Economy Size,” n.d.). If this also gets into taxable circulation, it could immediately double the revenue even further, where the revenue may easily touch anything between $60 and $70 billion.
Individual overall purchasing power would improve as a consequence of cheaper prices and lower costs; more industries would be set up because of lesser taxes, and greater investments would also be made for similar reasons. It is thus expected that a natural consequence of the phenomenon would provide better employment opportunities with much more financial activity, and as such, the revenue returns would grow even beyond what has so far been worked out. This would improve cash flows and generate substantial liquidity for development at the state level.
Yet, the greatest benefit from a digital economy would be to allow very limited space for corruption. It would speed up financial activity, make all transactions transparent, and ensure that everything is accounted for with an institutional memory and record. A cashless society has existed ever since time in one form or another, and various systems have come and gone, such as the barter system and even now the blockchain, so it’s not really a very new concept. Examples of nations that have taken this road include Sweden, with the UK, Netherlands, Norway, Finland, New Zealand and China closely following (Philip, 2022).
Hurdles in Introducing a Cashless Economy
There are four major impediments to the introduction of a relatively tax-free society and a cashless economy. First and foremost, are the international money regulators, such as the International Monetary Fund (IMF) and the World Bank. Since these, particularly the IMF, have been strongly politicized by the United States and the Western world, the odds are stacked against a country like Pakistan in breaking conventional rules and setting up an autonomous economic system. Regulations based on the WTO, etc. would come into play, triggering sanctions. Yet, a means must be found in managing such a shift and if it is managed, Pakistan would be far less susceptible to international influences and would acquire the sovereign capacity to reform its foreign policy and political thought.
The second, most important spoiler would be Pakistan’s very own politicians, its system, and the people in power. A cashless system would limit corruption or application of illegal influence, and thus there would be resistance to it from within. However, with political will, a suitable process can be constructed so that any resistance to the recommendation is overcome. One of the ways is to remove the economic process from the political process and structure it to become an independent, standalone discipline/department/sector.
The third serious impediment is the existing low level of technology that exists in Pakistan today. This would not permit a fully digitized system to be established, and the little that is set up would be vulnerable to intrusion and hacking. It could easily be disrupted, thus causing identity theft or even a national economic crisis but safeguards against such a threat can be developed and applied. Given that the process will take time, it would have to gradually evolve and mature; yet the system being recommended, would be slow in implementation.
The last problem related to the recommendation lies in losing one’s individual privacy, yet this too can be mitigated by protection through suitable laws and regulations; however, it is the price that society would have to bear to own such a system. An alternative to the suggestion explained above is to stick to the conventional economic system as far as possible but lower taxes significantly.
There should be a gradual shift towards a digital economy to encourage the informal economy into mainstream circulation, and the government must privatize the SOEs at the earliest. It is expected that there would be some improvement in the economic condition of Pakistan, but in comparison, it’s the original suggestion that carries the germs of a game-changer.
National Assets
Pakistan’s national potential lies deeply integrated into three major assets. These are the Thar’s coalfield, Reko Diq, and the coastline, including Gwadar Port. This does not imply that there are no other minerals, sources, or other economic activities that are any less important but that the three mentioned can lead to economic progress at a substantial volume and speed if properly activated.
Thar Coal
The Thar coalfield is estimated to be the sixth-largest reserve in the world. It is estimated to be 175 billion tons (Kamran, 2022). Some have even described its potential to be greater than the revenues generated by Saudi oil and Qatari gas put together. Pakistan is currently suffering from an energy crunch. A shortage of energy resources stunts industrial growth. Thar has already constructed three plants, i.e. two that are 660 megawatts and one that is 330 megawatts, with overall production going up to 2,000 megawatts by another year (Kamran, 2022). Yet, even more plants to generate electricity can be set up immediately, provided water issues are resolved in the desert.
Scarcity of water can be dealt with by setting up desalination plants in the private sector. The location of such a plant should be close to the coastline and Rahim Ki Bazar from where the water would need to be piped, i.e., about 200 km. The capacity should be modular and serial in design so it can expand and cater to a growing industrial city in the vicinity of the coal mines. Gasification of coal gas is estimated to be a 3 billion equity-based project.
Monetization of gas is best served by manufacturing fertilizer. Pakistan already produces 6 million tons but is likely to need even more in the future as more land gets cultivated. A bag of urea today in Pakistan is Rs 2,250/- while the international price of urea is Rs 9,250.47. The delta is almost Rs 7,000/-. This allows for a huge profit margin, acquiring foreign exchange and generating revenue.
Russia is the biggest fertilizer producer in the world but is currently under sanctions. Europe, at present, is in dire need of fertilizers. This is a big opportunity for Pakistan to capture and sustain itself in the global market, provided it moves quickly. Gasification also allows gas to run industries as well as provide fuel for domestic use, thereby giving a lot of relief to the country as a whole. Gasification further permits the manufacture of polypropylene and other plastics. These materials are exportable and are important components of almost every industry.
The environmental issues connected to the use of coal can be addressed with new modern best practices. These involve carbon capture and re-inserting carbon back into the ground. If stored, carbon dioxide has a commercial value that could be organized for sale within the country as well as exported. Pollution and environmental contamination is further mitigated by other measures such as an appropriate tree plantation campaign and afforestation, which must be organized as a national effort.
Reko Diq
The Reko Diq reserves are considered to be one of the largest gold and copper mines in the world, with 5.9 billion metric tons of copper ore (grade 0.41%) and gold reserves amounting to 41.5 million ounces (Ishfaq, 2023). This requires a refinery to be built in the vicinity instead of exporting raw minerals and adding substantial value to the export. A refinery would take care of the country’s defense needs in copper and much more. Mishandling of the mines by the government as well as the judiciary has caused grievous losses to Pakistan’s economy.
The Coastline
Pakistan must come to terms with its own relevance around the globe to establish a place for itself amid the comity of nations. The coastline is of amazing geostrategic importance. Exploiting the location for better trade, connectivity, and economic activity could actually be a singular cause of the substantial economic turnaround for Pakistan. It also establishes Pakistan’s global relevance in its recognition as an international trade corridor—a singular factor that merits serious consideration.
With Pakistan, fortunate enough to have a continental shelf that extends 350 nautical miles into the sea, all ports along the coastline take on a great significance. The continental shelf itself is larger than any province on land and has more resources in it than anything available on land. With a number of ports along a long coastline (1,046 km), Pakistan needs to assert proper control over its continental shelf which is currently being plundered by external elements. This would boost fisheries, minerals, regulation of seafaring traffic, generating revenue, and “right-of-way” tariff for the deployment of pipelines and cables, etc.
However, coming to the Gwadar Port itself, Gwadar is a natural deep-water port and is central to the eastern and western hemispheres, making it very important to international shipping. The port is currently being constructed by China through CPEC (China-Pakistan Economic Corridor) arrangement, a flagship project of the Belt and Road Initiative (BRI). The region as a whole, including the subcontinent and China, is home to 25% of the global population and remains a lucrative international market and a huge consumer of food and energy (Yousaf, 2015).
Ports are of great significance to the land-locked Central Asian Republics, allowing them access to the world for trade when connected by road and pipelines. Russia, on the other hand, has limited port facilities all year around and has always been in search of warm water ports, which at present is limited to Sevastopol, Crimea. Gwader can provide and facilitate such a port to Russia on account of its warm waters, if Russia and Pakistan can come to a mutually beneficial bilateral agreement. This gives Russia an alternative to Sevastopol, mitigating the port’s strategic vulnerability as well as its limited capacity.
So, it is no wonder that all three superpowers, the US, China, and Russia, along with the EU, either already have stakes in the subcontinent or are in search of them for the future. This has led to competing interests in relevance to Pakistan’s coastline with economic as well as political interests, and present opportunities and challenges. Pakistan must play its cards very carefully and not play one power against another.
Take China for instance, its trade is basically through the Malacca Straits, now commonly addressed as the Malacca dilemma. It amounts to 16 million barrels of oil (Paszak, 2021) passing through daily and 100,000 ships carrying cargo annually (Calamur, 2017). Control over the Malacca Straits is now being contested. The US is asserting itself and has aligned other countries against China and its trade interests (Swaine, 2015).
China has had to seek an alternative to the Malacca Straits and has found it in BRI, of which the CPEC is a significant component. So why has CPEC become so important? The distance from western China to the Pakistani coastline is less than the distance it takes to transport goods within China to the Chinese ports. Currently, the distance traveled is 16,000 km, which takes 2 to 3 months; it which would reduce to 5,000 kms or 1 month at the most.
Thus, from a strategic angle, CPEC is more important to China than Pakistan but remains a game-changer for Pakistan as well. Because of CPEC, China has begun the industrialization of its southwestern regions since these are now easily accessible logistically. It also implies that in the future, Afghanistan and Central Asia could benefit similarly and bring in mutual economic expansion and growth.
Gwadar Port has the potential to be one of the world’s largest ports when it is completed in 2030 (Khetran, 2014). The berths at Gwadar can accommodate 200,000-ton tankers and other ships as well, which along with the newly constructed oil pipelines, fiber optics, etc., makes Gwadar an ideal regional trans-shipment port. It outdoes the Long Beach Port at Miami and has greater capacity than all the Indian ports put together. With its potential as a future trans-shipment port in the region, the Saudi government is contemplating investing in Gwadar in the construction of one of the world’s largest refineries (Yousafzai, 2019).
The future of such a port, if managed correctly, allows for huge development and international connectivity, ultimately improving the economic condition of Pakistan. The trade hub and conduit at Gwadar establishes Pakistan’s relevance in the region as well as the world as a trade corridor, connecting the east to the west—a key component in global trade as well as a supplier of oil and gas. If manufacturing industries develop within these CPEC corridors, the potential for economic growth is huge for the country.
Conclusion
Pakistan stands at a defining moment in history. With a background of missed opportunities and failed initiatives, Pakistan is suffering from self-inflicted irreversible damage to its economic condition. With a lack of a sustained economic policy and with gross indifference towards the well-being of its own people, Pakistan remains wallowing in abject poverty. It blunders on from day to day, unmoved, as it is denied a respectable position amongst the comity of nations.
On its march towards development and progress, the world in general, and the region in particular, have left Pakistan trailing behind surviving on handouts as it limps on from one day to another. It’s time for bold decisions and brave initiatives, grappling with the situation with courage, grit, and determination, and putting all national resources to work. The suggestions in this paper can be improved upon and there are many more aspects to economic development that can, and may be examined, but what has been stipulated in this document is the bare essential that must be executed at the earliest, if only and foremost, for the well-being of the people as well as future generations.
“There can be no keener revelation of a society’s soul than the way it treats its children.”
Nelson Mandela
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