Pakistan’s local and International Economy 

Oliver Jay

Pakistan recovered a lot of its lost wealth following a 1998 sanctions imposed on it by the Western world. The level of economic growth remained strong despite several countries around it recording negative growth. Inflation did not accelerate as quickly as had been widely predicted, and many individuals had anticipated.

Pakistan’s short-term balance of payments position remained viable after the World Bank and IMF resumed lending and debts were rescheduled by the London and Paris Clubs at the time of the conference where these papers were presented. This also has a major impact on commercial and non-commercial commodity prices in Pakistan, check current commodity rates in Pakistan here https://pricelive.pk/

The country’s poor reputation and policy uncertainties have kept overly cautious foreign direct investment and productive investment in general, indicating a more optimistic attitude in other nations in the region.

The convertibility of foreign currencies deposited by banks were suspended, and the London and Paris Club reschedulings were essential in the near term, but in the end they borne outrageous consequences for Pakistan’s capability of foreign borrowing. Social indicators in Pakistan remain poor, even those for a country of Pakistan’s population.

This article aims to explore how various factors impact Pakistan’s relations with other countries, the organization of which is inspired in part by the current series of studies on Country X in the world economy that have been produced by the Institute for International Economics, which I once worked under contract for.

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This emphasis on external issues must not be interpreted as casting doubt on the proposition that deep domestic reforms are necessary if Pakistan is to bring its economic progress back up to where it used to be, start to incorporate the social gains it deserves, and eventually become a miracle economy. It is conceivable only if universal education is finally reached, if population growth is rapidly lowered, if the rural oligarchy can be persuaded to give up the privilege of not paying any taxes, if encouraging reports of less corruption turn out to be true and become the first step in a far-reaching transformation of public life standards; in short, if the country’s progress continues uninterruptedly.

The Geopolitics of Pakistan

Pakistan’s strategic location at the crossroads between the Soviet Union and Western forces during the Cold War made it a policy dependent on the Great Powers. That advantage has concluded, as evidenced by the hostile G-7 reaction to last year’s nuclear tests that resulted in the imposition of sanctions that would have harmed the economy had they continued for longer. As Nehru’s son-in-law current regional partners, Pakistan will have to develop self-sufficiency that is curable thus far.

The Globalization has strengthened regional groups in recent years, while the rise of global interconnectedness has only encouraged this process. On the other hand, since the 1980s, some economists (e.g. Bhagwati and Krueger, 1995; Srinivasan 1998) have written that these opposing forces are actually complementary.

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Instead of considering regional groups as a threat to the international system, I believe that they do provide opportunities for natural integration deeper than that of the international level. Moreover, they involve the possibility of trying out new ways of integration that would likely be beyond the scope of an international agreement between them.

Given Pakistan’s topographical context, it may be natural to raise the question whether there is any association it might make with one of the many commodity-producing countries on its northern border. links with these countries might be limited.

The war in Afghanistan has come full circle and transit routes for its energy exports have resumed. These routes can provide an opportunity to exchange Pakistani industrial and agricultural commodities for energy supplies, but they offer few sustainable options for Pakistan’s economy.

Due to the considerable and unequal distribution of wealth in many of Pakistan’s Western neighbors, there’s significant cultural and religious connectivity. On the other hand, Iran might be a region of moderate industrial value, so it does not offer much potential for the development of trade in intermediate industrial products.

It is a region with contested political problems but seems the most natural economic partner of Pakistan. I believe that both realist and strategic options for Pakistan ought to be considered. One is to deepen the cooperation in SAARC and the other one is to seek membership in the international system.

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Principle trade Partners

If the principal trade partners are the OECD countries, oil-importing countries are also an important part of the primary trade partners. Trade with Pakistan’s partners in SAARC is minute; the ASEAN nations are on a par with these trade partners, and are an important exporting market.

Sri Lanka and distant Bangladesh are more remunerative export markets than giant, near India. Of course, everyone says that trade with India takes place via Dubai, or that it’s smuggled across the border; that is, even if the accepted estimate is that half of the trade is omitted.

That’s likely to be why in 1998, Pakistan’s exports amounted to only 13.2% of its GDP and its imports to 16.1% of its GDP, which are low rates by international standards, but one should keep in mind that Pakistan is a fairly large country.

Conclusion

The openness of financial investment broadens different issues. We all understand the many advantages from capital investments that flows of financial capital can bring, from the possibility of increasing investment beyond the amount that can be financed by domestic savings (for a country where the rate of return on investment is greater than or equal to the domestic investment rate).

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