Flicker of hope

Farrukh Saleem
Friday, May 26, 2023

Pakistan's economy is being decimated by the destructive influence of its politics, creating a deeply alarming economic landscape. Per capita income has plummeted by a substantial 30 percent to a mere $1,141 within a single year. The specter of food inflation looms large, nearing a daunting 50 percent. Diesel sales have dropped 50 percent meaning that both commercial truck traffic from the Karachi port and farm-to-market activity is sharply down. Large-scale manufacturing has also contracted by 25 percent. Furthermore, Pakistan faces an imposing gross external financing requirement of $41.8 billion for the upcoming fiscal year.

Where is the flicker of hope? It resides in the glimmers of progress as the lone national institution confronts the economic decline brought upon by political instability. In essence, the sole political figure behind the current turmoil is finally being held responsible for his arrogant behavior, self-centeredness, and divisive tactics. It is a belated action, but it is a step in the right direction. Amidst political turmoil, Venezuela suffered from the absence of a vital national institution, leading to a staggering inflation rate of 400 percent. Tragically, countries like Zimbabwe, Sudan, Somalia, Yemen, Congo, Iraq, Libya, Mali, Guatemala, and Haiti, because of the absence of a robust, disciplined national institution, were left to endure the harrowing aftermath of political instability, resulting in severe economic repercussions. Their citizens suffered immensely as their economies crumbled under the weight of uncertainty, underscoring the critical importance of a permanent, powerful national institution.

In terms of political stability, South Korea has been fortunate. Under the leadership of Park Chung-hee, a politician and military general, the country experienced a 16-year tenure that brought about the remarkable "Miracle on the Han River." This unprecedented transformation lifted South Korea from the depths of war and poverty, propelling it to become one of the world's foremost industrialized economies.

Political stability in Vietnam created ‘Doi Moi’ which in turn resulted in long-term plans, investor confidence and sustained economic growth. Vietnam's thriving economy exemplifies how stability drives lasting economic success. The following countries serve as recent examples of economic successes achieved through political stability: Malaysia, Taiwan, Singapore, Thailand, Indonesia, and Rwanda.

Stable political systems provide policy consistency and thus a predictable business environment. Stable political systems are attractive to foreign investors seeking secure and profitable opportunities. Political stability provides a solid foundation for sustainable development.

Demography, geography, and political stability stand as vital prerequisites for economic prosperity. In terms of demography, Pakistan boasts a highly advantageous age structure, with a substantial proportion of its population falling within the working-age group. Geographically, Pakistan occupies a strategic position at the intersection of key trade routes, making it an essential conduit between South Asia, Central Asia, and the Middle East. However, the one crucial element that eludes Pakistan's path to success is political stability. Once this fundamental pillar is firmly established, the nation will possess all the necessary ingredients to unleash its true economic potential. A flicker of hope has emerged.