Pakistan has been a victim of hybrid warfare now for many years by the Western powers through their control of the international financial institutions (better known as Bretton Woods Institutions) and non-financial institutions. They have subjected Pakistan to innovative tactics of blackmailing, pressure, sanctions, discriminatory duties, quotas, travel advisories, adverse rankings and ratings, and hostile propaganda which try to ensure that Pakistan’s economy does not takes off. Their objective has been implemented mostly by their local henchmen and hitmen holding important positions in the policymaking institutions of Pakistan – some of them hold dual citizenships. While Pakistan has been fighting terrorism, these terrorists of a far lethal variety who have inflicted far greater damages have been let off the hook. Tragically, the obvious end result is that Pakistan lacks a nation building strategy harnessing its rich natural resource endowments, demographic advantage, geostrategic location, quality of its civil/military institutions, social capital etc.
Pakistan has been made a ‘hostage’ of the international financial institutions (IFIs) ever since it allowed the World Bank Advisory Group to establish itself here in 1954, after joining the Western-sponsored alliances such as CENTO (Central Treaty Organization) and SEATO (South East Asia Treaty Organization). Our membership in both security pacts miserably failed to provide Pakistan national security or economic take-off. Not only West, but India also utilized the weakness of Pakistan’s political and economic institutions to launch a hybrid war through so-called cultural and trade exchanges. As a result, Pakistan had to pay a high price with the dismemberment and separation of East Pakistan in December 1971. The tragedy of 1971 taught Pakistan that national security is ultimately its own responsibility. Pakistan was left all alone to face the consequences of its own dismemberment. The decision of India to go nuclear in May 1974 by detonating its atomic device, mischievously named ‘Smiling Buddha’ further added to Pakistan’s woes.
The Indian nuclear test in fact made a mockery out of Buddha’s teachings. As if that was not enough to break the will of the Pakistani people, the Indians continued to work on their nuclear capabilities with easy, charitable access and technological assistance of the Western powers including USA, France, Canada and Australia. The outcome was Pokhran-II, India’s second series of detonations of five nuclear devices on May 11 and 13, 1998, backed by unprecedented threats to Pakistan. To India’s shock, Pakistan responded by detonating six nuclear devices on May 28 and 30, 1998. The Western powers hastily imposed discriminatory sanctions on Pakistan in efforts to cripple its economy. India was, however, let off the hook by the West in their blatant exercise of double standards.
Pakistan’s nuclear tests restored the strategic power balance and national pride. Moments of trial in any nation’s history are also time for hard decisions. Those who can take such decisions ensure their future. Pakistan’s decision to go nuclear only achieved half of the objectives of restoring national dignity. Pakistan’s economy continued to be a hostage to IFIs. The financial hitmen continued to duly perform their duty of escorting Pakistan to its colonial and post colonial masters, so that it would not break loose. Before Pakistan was offered IMF stabilization program in 1989, its economy was doing better than India and was far ahead of Bangladesh. India was actually a bank nation being forced to mortgage its gold reserves to the Bank of England in settlement of its debt obligations in 1991.
The objective of IFI hitmen for escorting Pakistan to IMF was not to boost Pakistan’s economy. They had perfected the template to create trade deficit, current account crisis and debt payments’ crisis through their henchmen in top policymaking institutions such as the State Bank, Federal Board of Revenue and Ministry of Finance. They ensured Pakistan’s return to IMF. Thus the musical chair of politics, plunder and pains has been inflicted on the people of Pakistan, making the country look like a ‘banana republic’ or a ‘basket case’. I remember a senior German diplomat telling me as to how a ‘nuclear power’ can be a ‘pauper state’. He was right! Pakistan has everything to become a prosperous state, except it is the absence of policies which could make it happen. Pakistan cannot continue with its old ways of thinking and doing things with regards to business. China is a good example as it continued with its sustained nation building efforts.
China is helping revive Pakistan’s economy and power profile in the strategic regions of South Asia, West Asia, Central Asia, the Gulf and the Indian Ocean. Pakistan’s Achilles’ heel is the colonial mindset of our feudal and tribal aristocratic political and non-political elite to continue to look up to the West, which has treated Pakistan as redundant. Pakistan has been more or less written off by the Western powers, though the dominant feeling now is that it was premature. Pakistan’s time to seek relations based on sovereign equality, mutual respect and non-interference with its former Western allies is now lost. The Western powers know that Pakistan has been an integral ally to the West for a longer period than any other nation in history, both before and after the Cold War. What Pakistan got in return, however, was double play, discrimination, denial and deception.
When I went to China in 1980 to learn the Chinese language it was behind Pakistan by at least 25 years. Today China is 100 years ahead of Pakistan. What China achieved, and how it was achieved is not because it had waged wars to grab other nations’ resources, received foreign aid from IFIs or discovered oil and gas resources. China succeeded because it undertook home grown structural reforms under a collective leadership which was prepared to acknowledge mistakes and undertake change. China’s visionary reformist statesman Deng Xiaoping was prepared to take risks and hard decisions to experiment with new reforms, ideas and initiatives. His famous metaphor of ‘crossing the river by feeling the stones’ reflected his readiness to take chances but at the same time exercising caution at every step but without stopping the journey altogether. He also refused to accept the position of those who advised against undertaking the new journey for change. He directed the Communist Party to move away from perpetual revolution, and instead embrace perpetual reforms.
The reformist leadership in China promoted their traditional soft power values (better known as Chinese characteristics) of learning, tolerance, respect, collective wisdom, determination, courage, pragmatism, humility, moderation and patience. The policy of economic reform and open-door policy followed since the 3rd Plenum of the 11th Central Committee of the Communist Party in December 1978, impacted every aspect of the society. The reforms ended the security paranoia, restored individual freedom, rule of law, merit and efficiency. The Chinese harnessed their own social capital, resource endowments and assimilated proven global practices by investing heavily in human capital and deputing students for higher education abroad. The overseas Chinese were mobilized and their ‘trust’ was restored as much as among the people in China itself. China also utilized the favorable international environment of peace and stability to fully harness the opportunities provided by the globalization and digitalization wave.
China has successfully defeated attempts by its own powerful adversaries to inflict a hybrid war and deny it an economic take off. China has lifted a billion people out of poverty and achieved a great level of economic and technological strengths. It has now also become the largest global economy with Gross Domestic Product (calculated at credible purchasing power parity basis) having overtaken the U.S. GDP in 2014. China has now decided to build Belt and Road Initiative (BRI) which comprises six arteries that will connect and integrate sixty-five countries in the Euro-Asian region. The BRI worth USD 4 trillion will be completed by 2030. The six arteries include the USD 62 billion flagship project of the Chinese government China-Pakistan Economic Corridor (CPEC). The CPEC project involves construction of energy projects, infrastructure projects, pipelines, railways and industrial zones. The USD 62 billion worth CPEC is the first installment of the proposed BRI investment. Almost ninety percent of the subsequent private sector investment in CPEC projects is meant to arrive by the relocation of industrial units to the industrial zones meant to be set up along the three corridors. Pakistan has lost precious time in internal debates kept alive by the narrow interests, without undertaking comprehensive policy reforms.
The challenges for Pakistan in the way of emulating China is the protracted leadership crisis; self-indulgent feudal/tribal elite and vested interests; socially unequal society with low priority to education; top down policies; strong individuals and solo flights; no proto-industrialization/lack of rural industrialization; presence of IFI hitmen/foreign agents; security state paradigm (not economy state); absence of development mindset, lack of honesty, humility, teamwork, discipline, patience; obsession with Western culture/class consciousness; non-inclusiveness, feudalism, tribalism and parochialism; archaic institutions/red-tape; absence of consensus and collective wisdom; an ostentatious culture in society; decay in values and social capital; no keenness to learn from proven global practices; lack of the political will and capacity to undertake comprehensive policy reforms, etc.
Pakistan stands in 2018 where China stood in 1978 before embarking on the journey of reforms which transformed the country for good. CPEC can be a ‘game changer’ only if Pakistan can undertake home grown ‘structural reforms’ with new policy initiatives for documentation of economy, domestic resource mobilization, taxation, agriculture, energy, water resources, ease of doing business, simplification of rules and procedures, trade and finance, rural industrialization, good governance, civil service, administrative structures, energy, mining, environment, overseas Pakistanis, maritime management (blue economy), civil aviation, higher education, etc. Although Pakistan has met more than its due share of missed opportunities and continues to operate at less than 2 percent of its actual potential, there is no reason for despondency.
Pakistan is amongst the most well-placed countries for the future. If we put our act together, Pakistan can achieve sustained 7-10 percent GDP growth rate for a considerable period of time enabling its “economy take off”. China’s experience demonstrates that reforms are the key to progress. A central institutional mechanism is needed for effective coordination among all the stakeholders for the timely completion of CPEC projects, including the establishment of industrial zones. CPEC has the potential to add two percent GDP growth rate for many years to come. Pakistan’s young demographic is also estimated to contribute additional two percent GDP growth rate annually for the next 35 years. With 7-10 percent sustained GDP growth for the next two decades, Pakistan could indeed join the ranks of the top ten economies of the world by 2050. CPEC can surprise the world, just as Pakistan’s nuclear achievements did. Pakistan is on the right side of history. Pakistanis are a determined lot, they have always achieved what they wanted. They will also achieve what remains to be achieved! The future belongs to Pakistan and the best is yet to come.
The writer has served as Pakistan’s Ambassador in Germany, Singapore and Mauritius. He worked in China for two diplomatic assignments for nearly a decade. He is the author of several books on China. Currently, he is Director Chinese Studies Centre, National University of Science and Technology (NUST). Islamabad.
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