Pakistan and global economy

There are no two opinions in the notion that it is the age of globalization. According to a quote attributed to former United Nations’ Secretary General Kofi Annan, arguing against globalization is like arguing against the laws of gravity. The world is coming from close to closer and from closer to closest. Globalization is the process and it always goes forward. There is no going back. The political development in various parts of the world, including the United States, the South East region and Europe, all are trying to make bonds to protect common interests and improve economy. The China Pakistan Economic Corridor is also part of the globalization process and regional connectivity. The election of Donald Trump in the United States and Narindra Modi in India are seen as the last effort to stop the process of international integration and both people are bound to fail. No country in this age of information dare live in isolation and economic cooperation is the only option. The era of war has been over and it is time of economic competition.

The exit of Britain from the European Union will not only affect that country, but also shake the business interests of many nations. The economic policy of protectionism is no more viable and there are open competitions everywhere in the world. Pakistan is not an exception where all the efforts are being made to stop the inflow of foreign investment in the name of protecting the local industry. If every country adopts this policy the exports will be phased out and people will be deprived of common goods at competitive prices. Despite being beneficiary of the US Generalized System of Preferences, the country’s exports are falling and even the country is unable to reach its own record of $25 billion exports. The country has lot of potential to increase exports, which could be in the form of value added goods. The small and cottage industry of the country has made tremendous progress and has industrial surplus. But the small manufacturers have no access to foreign markets and only Pakistan missions abroad can do it for them. However, unless the government breaks the barriers of the bureaucratic tactics, the country would not achieve the desired goals of economic development.

If the government wants to enhance exports, it will have to address the structural issues which are limiting the production of value added goods and are hindering the growth of exports sector. Instead of introducing the laws for ease of doing business and offering tax concessions to foreign investors, the government apparently is not ready budge from its traditional restrictive business and trade policies.Pakistan even could not introduce the trade facilitation measures in line with the World Trade Organization Trade Facilitation Agreement.The government should not hesitate to become part of the globalization process.