Secular capitalism: de-facto game in the global village

By Zia Banday, Originally published in The Express Tribune, September 26th, 2016.

The United Arab Emirates (UAE), with a population of 5 million, is 20 times less populous than Pakistan. However, the country has made its mark in international trade. As per Comtrade figures, UAE’s exports have risen 51% from $253 billion in 2011 to $380 billion in 2014, whereas its imports registered a growth of 42% from $211 billion in 2011 to $299 billion in 2014.

An item of interest among UAE imports, which has registered phenomenal growth, is alcoholic drinks. UAE’s imports of alcoholic drinks have increased 4.5 times from $175 million in 2011 to $786 million in 2014. The country is annually attracting 25 million tourists, a number which is increasing each year. Obviously, availability of alcoholic drinks is not the only reason for large trade and growing number of tourists.

However, it does reflect the pragmatism of the rulers in catering to the plurality of tastes and requirements of foreigners visiting the country. Indeed, an overwhelmingly Muslim country has adopted secular capitalism as the economic creed to remain relevant in an increasingly globalised and interconnected world.

Whether we accept it or not, the de-facto game in the global village is secular capitalism. It remains an economic system, which is more focused on cutting across boundaries, whether mental or physical. Its purpose remains facilitating the process of money making. Commodification of tastes is reigning supreme. Quantum of global money movement is breaking records each year. Internet is working as a glue to spread ideas and fashions from New York to Africa. Economic freedom coupled with social liberties is opening up new vistas for innovation and prosperity. Countries, which are facilitating this convergence, are ahead of others in the game.

Where does Pakistan stand?

It is the sixth largest nation with a low-income economic profile. It has a resilient population that is striving for prosperity in not-so-conducive environment. Do we understand the enormity of the task of raising living standards of 200 million people? Despite the lofty declarations of our rulers about turning around the economic corner, are we aware of the burgeoning economic gap between us and comparable economies?

Let us first take a look at some numbers.

The population of Vietnam, Turkey, Thailand and Malaysia stands at 48%, 40%, 34% and 16%, respectively, of the population of Pakistan. As per World Bank’s 2015 data, Pakistan has recorded exports of $22 billion, attracted $0.98 billion of FDI and around a million tourists visited it.

In comparison, exports of Vietnam, Turkey, Thailand and Malaysia stand at $150 billion, $144 billion, $211 billion and $200 billion, respectively. Whereas the FDI flows in the same countries were $12 billion, $17 billion, $8 billion and $11 billion, respectively. Number of tourist visiting them stands at 8 million, 40 million, 27 million and 25 million, respectively. Beside tourism, all these economies have a well-diversified economic base.

Point to ponder here is to understand the relationship between an open society and economic diversification, which is essential for sustainable growth. And one should also take into account the investment done by these countries in their human resource development. Indeed, this amalgamation of factors induced employment generation and poverty alleviation across broader populations.

Coming back to Pakistan, we are ranked much low on competitive, innovation and other economic indices than the countries under comparison. Selling of ‘Image Pakistan’ remains a difficult proposition in an increasingly competitive and open world. Jury is still out on the probability of Chinese industrial investments in Pakistan on account of CPEC.

We have been unable to host a cricket Test match in over seven years. Presence of extremists in our midst and strategic assets at the peripheries doesn’t bode well as an investment advertisement for Pakistan. Our population growth rate is still much high among comparable economies that is also straining our domestic resources.

It is not all doom and gloom for Pakistan. We have a stable working market economy with a reasonable skilled manpower. Foreign money is flowing in power and some processing sectors. However, the pace of investment is not sufficient to remain competitive is not substantial. It affects our path for industrial growth, employment generation and poverty reduction.

We need to revisit our foreign and domestic policy priorities, as their impact on economic outcomes is enormous. And these choices have the potential of making a country irrelevant on both political and economic fronts in the long run.


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