Page 7 - Pakistan Link - May 17, 2019
P. 7

OPINION                                                                                                             MAY 17, 2019  –  PAKISTAN LINK  –  P7
           Economic Stabilization Requires Better Governance and Political Stability



                                                                                                                         pines, Vietnam, Taiwan, Malaysia, and Bru-
                 n By Misbah U Azam                                                                                      nei. So it is yet to be seen how the countries
                        CA                                                                                               in the region and the US, Russia, and China
                                                                                                                         would respond if the reserves are really found.
              enezuela – the Petrostate – is in an                                                                           All said, the PTI experiment has turned
              economic crisis. The inflation is                                                                          out to be a miserable failure. The Khan gov-
        Vso high that a cup of coffee today                                                                              ernment has not been able to deliver in any
        costs as much as the monthly rent of a one-                                                                      sector of governance. Media reports suggest
                     bedroom apartment did                                                                               that even the new economic team of non-
                     a decade ago. Economists                                                                            elected technocrats has been nominated on
                     believe that the countries                                                                          the demand of the International Monetary
                     which rely heavily on their                                                                         Fund (IMF). Now, the IMF will negotiate with
                     natural resources are often                                                                         its own ex-employees who may not be report-
                     vulnerable to the “Dutch                                                                            ing to the civilian government.
                     disease” because the foreign                                                                            On the other side, the opposition is get-
                     capital starts pumping into                                                                         ting ready to make its move in the coming
        the economy, increasing the value of the lo-                                                                     days. They have already sensed the vulnerabil-
        cal currency amid skyrocketing imports.                                                                          ities of Khan’s team and also the panic among
            All the labor and capital get sucked into                                                                    those who brought them in power. After Eid
        the natural resource while other sectors, like                                                                   al-Azha there may be more pressure applied
        agriculture and manufacturing, remain de-                                                                        by the opposition parties on the government.
        prived of any growth. Venezuela’s imports                                                                            In order to salvage the experiment, there
        grew almost 500% between 2004 and 2008                                                                           are strong chances that a move to bring about
        and the GDP growth rate went down almost                                                                         an in-house change will be  made after  the
        350% during the same period. The crisis con-  So much for the claim that “oil producing   other 5-10 years before it will be available for   budget by luring the turncoats from PTI and
        tinued after Hugo Chavez’s death in 2013, and   countries always have great economies”.  production and due to the highly sophisticat-  the opposition parties. The defections from
        the new leader, Nicolas Maduro, also has had   Pakistan’s economic managers have a lot   ed techniques of extraction, the price may be   the two main opposition parties, namely
        to face hyperinflation, climbing hunger, dis-  to learn from the economic disaster of Ven-  much higher than expected.  PML-N and PPP, have proved that they could
        ease, crime and death rates, and massive emi-  ezuela. After mismanaging the economy for   Another problem could be the reaction   hardly have an impact on the parties’ support
        gration from the country.             the last 8 months, the government in Pakistan   of oil-producing countries around the region   base but PTI has a lot more to lose if such a
            According  to an UNHCR  report  (No-  is now expecting that changing its economic   who would be losing their monopoly. The   move is made.
        vember 2018), around 3 million people had   team would do some miracle and all pledges   South China Sea region – which is home to   Some commentators argue that the main
        emigrated from Venezuela to Colombia (over   of Imran Khan will suddenly come to fruition.  a wealth of natural resources, fisheries, trade   reason for economic troubles in Venezuela
        one million), Peru (over half a million), Ec-  For the first 6-7 months, they hid their   routes, and military bases – can be one ex-  was that the Venezuelan leadership was some-
        uador (over 220,000), Argentina (130,000),   incompetence  behind  the  political rhetoric   ample. The Ministry of Geological Resources   what hostile towards the US and the US con-
        Chile (over 100,000) and Brazil (85,000).  that mismanagement during the last 10 years   and Mining of the People’s Republic of China   tributed to their economic problems in order
            What brought Venezuela – a country   was the reason for the economic woes. When   estimates that the South China Sea contains   to punish them, while Pakistan is friendlier to
        which has the world’s largest oil reserves – to   the media stopped buying this logic, the gov-  17.7 billion tons (approximately 130 billion   the US and so the US would not want to de-
        economic and political ruin?          ernment began to promise good news about   barrels) of crude oil (Kuwait has around 13   stabilize Pakistan.
            Experts believe that although the drop   an imaginary 205 million tons (approximately   billion tons of  crude  oil  reserves), though   The argument does hold some truth, es-
        in oil prices is one factor, the main causes of   1.5B barrels) of off-shore oil reserves, which   other sources claim that the reserves of oil in   pecially if one adds the Nuclear State dimen-
        economic melt-down were years of poor gov-  would – according to a boasting federal min-  the South China Sea may only be about 1.1   sion to the equation. But if we take a closer
        ernance, political instability and economic   ister – change the country’s fortunes over-  billion tons.         look, it isn’t something we can rely on. The US
        mismanagement which had driven what was   night.                               All of this is at stake due to the increas-  has already decided to leave Afghanistan and
        once one of Latin America’s most prosperous   Experts argue that even if that large   ingly frequent diplomatic standoffs among   right now it is trying to cut some kind
        countries to a nightmarish economic disaster.  amount of oil is discovered it would take an-  the countries in the region, including Philip-  STABILIZATION, P24



























































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