Faisal Ali Ghumman
Prime Minister Imran Khan is scheduled to visit Malaysia on November 20 and meet his counterpart Dr Mahathir Muhamad to garner the latter’s support in bilateral trade.
The visit is being much weighed in terms of seeking guidance and economic assistance by the PTI-led government rather merely signing mutual agreements in different fields as Pakistan is currently facing declining state in economy and dearth of funds.
After a ‘likely to successful’ visit of Saudi Arabia who pledged $6 billion to Pakistan to arrest the worsening crisis of balance of payment and deferred oil payment, Khan reached China in first week of November to seek further financial assistance apparently to reduce the size of a potential loan from the International Monetary Fund (IMF).
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The Chinese government preferred not committing any specific assistance and put its weight behind signing a series of pacts and agreements between two sides.
Federal Finance Minister Asad Umar was quoted as having said after China’s visit that about Pakistan had $12 billion financing gap of which $6 billion have come from Saudi Arabia while the rest has come from China. “So the immediate balance of payments crisis of Pakistan has ended. I want to make that clear in unequivocal terms that we do not have any balance of payments crisis now.” Before his visit to China, Umar had said at present Pakistan faced a total of $27 billion deficit which included $9 billion debt repayment this year.
Now, Mr Khan is leaving for Malaysia, a developing nation under the leadership of Mahathir Muhamad, to seek further support. It’s premature to say whether he is going to seek a financial package or only discuss Malaysian economic model to replicate it in Pakistan.
But, the important thing for Mr Khan is to bring the country out of economic clutches and for the purpose he should replicate the Malaysian economic model in letter and spirit.
In 1991, Dr Mahathir being PM had announced Vision 2020 under which Malaysia would aim to become a fully developed country within 30 years with average economic growth of approximately seven percent of gross domestic product per annum. The vision 2020 was accompanied by the National Economic Policy (NEP)’s replacement the National Development Policy (NDP) which achieved success out one of its main aims- poverty reduction.
By 1995, less than 9pc of Malaysians lived in poverty and income inequality had narrowed. The Mahathir’s government cut corporate taxes and liberalised financial regulations to attract foreign investment. The economy grew by over 9pc per annum until 1997 prompting other developing countries to try to emulate Mahathir’s policies.
Despite global economic crisis in 2008 the country pursued its economic agenda. Currently, the Malaysian economy is the third largest in Southeast Asia and is 38th largest one in the world. Malaysian labour productivity is significantly higher than neighbouring Thailand, Indonesia, Philippines or Vietnam due to a high density of knowledge-based industries and adoption of cutting edge technology for manufacturing and digital economy.
According to the Global Competitiveness Report 2017, the Malaysian economy is the 23rd most competitive country in the world in the period of 2017–18. The brief review of Malaysian economic development is directly linked to the fate of cash-starved Pakistani nation whom Prime Minister will reach Malaysia along with a high-powered delegation on Nov 20 on two-day visit for bilateral cooperation.
At a time when Pakistani exports are touching lowest ebb, current account deficit is soaring, balance of payments crisis is further looming, manufacturing industry is dying, rupee is deprecating against dollar, cost of living is getting high because of inflationary pressures, poverty ratio is increasing and water scarcity and power tariffs are haunting agriculture sector, the PTI-led government should request Dr Mahathir for dispatching a team of economic experts for some specific time to educate and train Pakistani government for replication of Malaysian economic model.
PM Khan has no doubt taken some stance on hardcore structural bottlenecks the country is facing, but it’s a long road ahead for his government.