of globalisation on Pakistan
Globalisation is here to stay
whether we like it or not Shaukat Aziz
From SHAMIM AHMED,
Jul 24 - 30, 2000
All the main speakers at the seminar on "Impact of globalisation
on Pakistan with special reference to South Asia" including Finance Minister Shaukat
Aziz, Dr. Ishrat Hussain, Governor State Bank of Pakistan and Dr. A.R. Kamal, Director,
Pakistan Institute of Development Economics (PIDE) were unanimous that Pakistan should
benefit from globalisation but it needs proper preparation to meet the challenges of the
globalised economy. India and China have benefited immensely from globalisation after
doing their homework properly, they maintained.
The Seminar was arranged by Dr. Mehboob-ul-Haq Human Development
Research Centre on the occasion of the second death anniversary of the world famed
economist Dr. Haq.
The audience which comprised former minister, Mr Sartaj Aziz, retired
senior bureaucrats, economists and research scholars and senior journalists apparently did
not share the views of the speakers as was amply manifested from their highly critical and
probing questions. They seemed to be of the view that with its little industrial base
Pakistan was not in a position to compete in the international market for a variety of
reasons. It will prove disastrous for the country's economy if trade was opened without
proper home work. Pakistani manufacturers need various concessions in the form of reduced
input cost and a long time to develop the expertise to compete in the highly advanced and
sophisticated world of international trade. Federal Minister for Information Javed Jabbar,
who summed up the second session of the seminar, obviously influenced by the mood of
audience, stressed more on Pakistanisation than globalisation.
Finance Minister Shaukat Aziz underlined the need for safeguarding our
identity and cultural values to successfully participate in the globalisation process and
avoid being marginalised. "Globalisation is here to stay whether we like it or not.
We have to embrace it, not fear it. We, however, must not compromise on our principles and
safeguard our identity and cultural values. This will make Pakistan a more robust country
in the comity of nations," Shaukat Aziz said.
He said the process of globalisation has started and it cannot be
stopped, so those countries which would oppose it or try to escape it would get
marginalised themselves. Realising this fact, Pakistan has to strive for a level-playing
field and fight for a better place in the process. As a result of this process, trade,
investment and human capitals will flow freely across the international borders. In view
of these unavoidable developments, foreign policy would also have to be tuned up
accordingly with special focus on economy and attracting foreign investment.
Referring to the possibility of brain drain due to globalisation he
admitted this has also become a reality and cannot be stopped even if any country want to.
Anyhow, he said the government has given some concessions to professionals and other
individuals in the budget to stay in the country. One way to escape from this brain drain
is to educate such people and make them aware of its fallouts on the country. The
government on its part has started large-scale training and other programmes to develop
the skilled manpower and providing them better wages to discourage them from going abroad.
This programme has been initiated to prepare professionals to meet the future challenges.
Dr. Ishrat Hussain, Governor State Bank of Pakistan said Pakistan
should immediately address to the issues of growing international trade, short-term and
long-term capital investment and flow of labour to other countries to benefit from
globalisation as India and China have done. In his keynote address, the governor said that
it is important to watch how nations look after their interests in the globalised world.
Pakistan has allowed more liberalized regime much earlier in 1960s but fallen behind in
last ten years to get benefits of globalisation, he said.
There are five dimensions of the issue regarding Pakistan in which its
growth rate has slipped from six per cent to three per cent with high population growth
rate of 2.9 per cent and stagnant per capita income.
This indicates that there is a proportional relationship between high
growth and incidence of poverty. This has created unequal growth producing greater social
pressures and reducing benefits to larger part of population. Regional gender and other
social inequalities have increased a lot in recent years".
Public policy is also an element, which substantially suffered from
absence of globalisation benefits. Fiscal deficit increased gradually which left a small
space for public expenditures. Pakistan could have achieved eight per cent GDP growth if
it has efficiently invested public expenditures. Poor governance decreased access of
common man to public services that gave rise to intense pressure on public services."
Pakistan's exports remained stagnant and foreign investment registered
insignificant improvement over the years. Showing greater leaning towards acceptance of
globalisation and developing measures to face it, Ishrat said it could generate employment
if labour-intensive export industry expands." Consumer gets cheaper goods. Long-term
capital investment contributes a lot to economic growth.
While summing up at the conclusion of questions and answers session Mr.
Shaukat Aziz agreed that achieving higher growth, competitive industry, development of
human capital, better economic management, spread of information technology, no compromise
on country's sovereignty and replacing political diplomacy with economics are the basic
tools to tackle the issues of globalisation.
Explaining these features, the finance minister said the industry
should produce superior quality products and carve out a niche for domestically produced
goods. Pakistan should focus on the specialisation of output operations in the
manufacturing sector. He also agreed that a lot of ground work was needed to achieve this
position for Pakistan manufacturing sector.
As a participant in the seminar this correspondent was reminded of the
visit of a delegation of Indian Chamber of Commerce and Industry which visited Pakistan in
the wake of Indian Prime Minister Vajpayee's visit to Pakistan in February 98 and held
extensive discussions with their Pakistan counterparts. This correspondent was invited as
an observer to attend one of such meetings in Islamabad where the Indian manufacturers
offered to supply Reilegh Bycle at Rs1100 against Pakistani price of Rs. 3000, Vaspa
Scooter at Rs.35000 against Pakistani price of about 68000/- and Maruti car (our Suzuki
Mehran) at Rs.250,000/- against Rs.375,000/- in Pakistan. They also offered steel and
steel product at about 66 per cent of the prices being charged by the Pakistan steel mill.
One wonders what would happen to what ever little industrial base we have in Pakistan if
we enter into the race of globalisation without any preparations to meet the global
challenges. We will obviously be faced with numerous economic pulls and strings within the
process of globalisation, if we failed to prepare ourselves to face the emerging world
scenario. We will, therefore, have to take tangible steps to safeguard our social,
cultural and economic interests to resist the forces of pressure in the globalisation