Mapping Pakistan’s Governance In 21st Century – OpEd

The way citizens see various roles of state has undergone change during last few decades, in some instances rapid, and in few revolutionary. This has encompassed not only the way state manages economy and organizes delivery of services but also how it allocates responsibility to different levels of government and responds to citizens’ needs.

Governance refers to all processes of governing, institutions, processes and practices through which issues of common concern are decided upon and regulated. Good governance adds a normative or evaluative attribute to process of governing. good governance relates to political and institutional processes and outcomes that are necessary to achieve goals of development. 

Pakistan’s economic performance over the past seven decades has been a mixed bag. The country, which started off virtually from scratch and was almost written off by many analysts at the time of its inception, has bounded ahead in the face of enormous challenges. Today, Pakistan offers liberal trade and investment regime in region. It is fully integrated into multilateral economic and trading systems. In order to appreciate impediments faced by Pakistan on road to economic development and prosperity, it is imperative to take stock of country’s economic predicament at time of its birth. 

Since independence, Pakistan’s economy emerged as semi-industrialized one, on textiles, agriculture, and food production, though recent years have seen push towards technological diversification. The economic situation of Pakistan is satisfactory because rapid growth rate has resulted in a quadrupling of per capita incomes and reduction in poverty levels by one half despite fairly high population growth. Structural changes have transformed a predominantly agrarian economy to a more diversified production structure. Manufactures account for 80% of exports.

The governance issue prevails in many parts of the world. Several countries are facing this conundrum. It is not denying the fact that governance plays a key role in growth of any state. The absence of governance causes various issues that lead this state towards abysmal shambles. In this contemporary world, developing countries present worst-case scenario in this regard in order to achieve long-term economic stability. 

In first decade after independence, Pakistan’s economy grew on average 3.1%. Despite overall modest growth, manufacturing grew at healthy rate of 7.4%. During 1960s, growth rate more than doubled to reach 6.8%, which was underpinned by 5.1% growth in agriculture, 9.9% growth in manufacturing and 6.7% growth in services. However, healthy growth rate couldn’t  be sustained and next decade saw it come down to 4.8%. The nationalization policy is stated to be one of factors which put the brakes on economic march. While services sector nearly maintained its robust expansion, agriculture and manufacturing growth fell to 2.4% and 5.5% respectively. 

The economy regained momentum during decade of 1980s with overall growth of 6.5%. But as in past, growth rate fell to 4.6% during 1990s as country remained in throes of political instability as well as struggled to undergo structural economic transition. The next two decades witnessed modest growth rates of 4.7% and 4.4% respectively. During this period, Pakistan waged an epic struggle to ward off an existential threat posed by terrorism. The war against terror has tolled upon national economy. 

As per data available with Pakistan Bureau of Statistics, like most other developing economies, fiscal deficit has been a norm in Pakistan. In 1960s, average fiscal deficit made up 2.1% of GDP, which more than doubled to reach 5.3% in the 1970s and further to 7.1% during the 1980s. During 1990s, fiscal deficit came down marginally to 6.9% before falling significantly to 4.6% during 2000s. During current decade on average 6.2% fiscal deficit has been recorded. In 2017, Pakistan’s fiscal deficit was 4.5% of GDP compared with India’s 6.5%, Bangladesh’s 4.9% and Sri Lanka’s 4.8%.

In war against terror, no other nation sacrificed as tremendously in terms of both men and materials as Pakistanis have done. The nation’s incessant and intrepid campaign against militancy has tested resilience of economy. Between 2001-02 and 2017-18, direct and indirect economic cost of war on terror teetered on edge of $127 billion, which accounts for nearly 40% of Pakistan’s present GDP of $319 billion.

The road and highway network in Pakistan spans 260,000 kms – more than five times the length inherited in 1947. Modern motorways and superhighways and four-lane national highways link the entire country along with secondary and tertiary roads. Despite these harsh challenges both at domestic and international fronts, Pakistani governments fought well to uplift country. Even during Covid, Pakistan’s currency and economy were flourishing at high pace. Pak Rupee was best currency during Covid era. 

At strategic fronts, Pakistan is having very troubled neighborhood. In its Eastern side, India is located, which never missed single chance to destabilize Pakistan. With already having limited economic resources, Pakistan spends major chunk of GDP in defense sector due to Indian hegemonic designs. Likewise, on Western front, Afghanistan is located, which has witnessed many civil wars. The Afghan soil has become cauldron of non-state actors. The security situation in Afghanistan is having spill-over affect over Pakistan’s security and economy. To curb menace of terrorism on Western front, Pakistan is spending huge sum of money, which is hurting economic spectrum. The influx of Afghan refugees has further complicated the matter for Pakistan. 

Iran is another neighbor of Pakistan. The country is under direct US and Western sanctions. Pakistan cannot continue its trade with Iran freely due to economic embargos. Despite troubled neighborhood and changing regional geo-strategic environment, Pakistan is performing well by extending all possible facilities to its people. The is absolutely no truth in reports of Pakistan is going to be default. 

The war on terror has been most tiring for Pakistan because not has it consumed the state’s strategic and conventional resources but the menace of terrorism which is as a big challenge to grapple with. However, despite all the bloodshed and loss, Pakistan still manages to survive and stands tall in the face of all these challenges.

Most recently, the economic turmoil is putting heavy pressure on Pakistan’s new government, which is currently in long-running negotiations with IMF on a bailout deal to stave off a disastrous default on foreign debt. Likewise, with government and armed forces’ tireless efforts, Pakistan can mop up all its socio-economic and religious political evils from its soil.

In a nutshell, governance is a phenomenon that smoothly steers government and state. However, the game is not over yet. Pakistan can come back on the right path by taking some extraordinary steps in this sphere.