Pakistan’s
economic position in world’s economy is that Pakistan is the 47th
largest in the world in nominal terms and 27th largest in the world
in terms of purchasing power parity. Pakistan’s economy is semi-industrialized
which mainly includes textiles, chemicals, food processing, agriculture and other industries but the
various socio-economic and political problems are being faced by Pakistan
including economic loss due to both the Soviet-Afghan war and ongoing war on
terror, energy crisis, low foreign direct investment (FDI) and huge dept trap,
poorly managed tax system, low export and high import, inflation, natural
disasters, a fast growing population and unemployment, mixed levels of foreign
investment and a costly ongoing confrontation with neighboring India which has kept Pakistan in isolation from the rest of
the world.
For last few
decades, fair globalization has been one of the biggest challenges. The fair
custom of how to shape the growing combination of economies and societies in a
social and democratic way are widely discussed. In the context of global
economy and global governance, Least Developed Countries (LDCs) are mostly
confronted with the effects of globalization and without having enough
opportunities to take a deeper look at the underlying issues and to analyze
political options for dealing with the global challenges.
The word “globalization”
is having multi dimensions which imply different meaning for different people worldwide.
Some focus on the economic dimension and hence emphasize on the global economy,
whereas others focus on the trade which includes Intra-industrial trade,
emerging market economies multilateral governance and services. Besides this, few
others focus on the cultural dimensions of this phenomenon and how
globalization has affected different aspects of their culture, still some focus
on the political aspects of the structure of globalization.
In a compelling
scenario of the sensation of alluring globalization, Pakistan has entered the
21st century with unsure intuition of hope and gloom in the context
of realizing globalization-based economic development. Globalization is indeed
the trendiest dynamic in the whole world. Pakistan’s ever-continuing status as
a low income country, along with its serious problems of unsustainable economic
growth performance and perpetual debt crises which have culminated into growing
stagflation and increasing incidence of poverty even in the contemporary regime
of globalization, has become a prime cause of the widespread disillusionment
and skepticism of Pakistani masses about globalization.
There is difference
of opinion regarding the desirability of globalization that simply implies
openness and integration of the domestic economy with rest of the world in
order to keep pace with dynamics of the international economy. The impact of
globalization varies from country to country and from region to region
depending on the level of social, economic and political developments as well
as macroeconomic policies. Least Developed Countries (LDCs) have gained as well
as suffered from globalization. Globalization is the need of the hour and no
country can afford living in isolation. LDCs can counter the negative effects
of globalization if they unite and adopt policies that adequately serve their
genuine cause.
Like
other LDCs, Pakistan’s economy requires abrupt reforms to triumph over
the challenges because any more delay in initiating much-needed sector-specific
reforms would further aggravate the situation.
In order to
sustain the economy, Pakistan has to improve its taxation system because less
than three million of Pakistan’s 175 million citizens pay any income tax and
its tax-GDP ratio is just 9 percent. In this regard, Pakistani legislators must
build a consensus to tax the elite to overcome the economic crisis. In
Pakistan, it has also become the need of hour to put focus on the maintenance
of law and order and economic stability because it is the only way to sustain
the economic growth and creating spaces for developed countries to invest in
Pakistan. If the authorities do not focus on prevailing peace in current times
of unrest and violence, the investors will take their money elsewhere in other
countries where the safety and security is guaranteed.
Last not least,
Pakistan also has to revise its economic strategies and should start thinking
on ending the restrictions on trade and investment. If there is no quick
progress made to overcome the shortage of resources and to solve the economic
constraints, it will put huge burden on GDP growth which can lead Pakistan to
the further socio-economic and political crisis.
By: Abdullah Dayo
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