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A new look at the economy

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M. Ziauddin

Pakistan’s economy has remained as unpredictable as our cricket team all these 70 years of our existence.
We have recorded growth rates of 10-12 per cent in some years.
And found ourselves in the pits with 2-3 per cent in some years.
We have been known as a middle income country for some years.
But it is more of statistical garbage than a reality as there exist some small little islands of prosperity surrounded by a vast sea of poverty.
So what do we do now?
Continue living with such a depressing scenario and suffer the imminent consequences.
Or try looking for ways to break the shackles of the model in vogue?
Let us take a look at our comparative advantages:
1) We are an agricultural country;
2) We are a market of about 200 million people;
3) Pakistan is located at the crossings of trade routes from Casablanca in Africa to Kashgar in West China’s Xinjiang Uyghur autonomous region and from Thailand in Southeast Asia to Turkey beyond the Middle East.
These advantages can be exploited to the maximum if we become a trans-shipment economy.
Rather than continue to hanker for an export-led economy.
Which we have been trying all these last 30 years or so to achieve but without any success.
Converting our economy to a trans-shipment one would require a well-thought-out trade policy.
That would allow almost free-of-duty entry of raw materials, intermediaries and equipment in knock-down condition.
To be warehoused in Pakistan and then forwarded to final destinations after the required value addition.
Such a regime would also require letting the rupee float on its own without the support of any artificial crutches.
Such a policy would also attract foreign direct investment.
In avenues in which it would be more economical for the sponsors to fabricate items inside Pakistan for local consumption.
And also to re-export them to the four-corners from the ‘hub’.
This will also facilitate the transfer of technology and training of skilled manpower.
Transfer of appropriate technologies would also open the way for Pakistan to graduate from being an agricultural country to a leading high quality processed-food and light manufactured goods exporter.
New Opportunity
Luckily for Pakistan a new opportunity in the form of China-Pakistan Economic Corridor (CPEC) has opened up between Balochistan—— which is said to be........

© Pakistan Observer