In the seminar in Karachi on Wednesday on the subject "Interplay of Economy and Security" by the Inter-Services Public Relations (ISPR) in collaboration with the Federation of the Pakistan Chambers of Commerce and Industry, the Chief of the Army Staff General Qamar Javed Bajwa expressed concerns regarding the state of Pakistan's economy and its border security. This rare event proved to be a rewarding one. His observations were more or less in line with what the economic gurus and the media are voicing for a year. Over the last six months, the situation has further deteriorated because of the political instability and the government's lack of focus on economic issues, bogged down on account of the Panama-gate crises. The stock market has nosedived from 52,000 points in May 2017 to 40,000 points this week. The real-estate market has come down by around 20 percent, and exports and FDI remain sluggish and the pressure of loans and liabilities is mounting.
In Pakistan, the armed forces are the principal stakeholders as their budget is a certain percentage of the GDP of the country. If the country's growth goes down, so does their budget. The situation here is more complex as Pakistan has to balance its defence capabilities with that of India. India's average GDP growth from 2015 to 2017 oscillated between six and seven percent, surpassing that of China. Pakistan's GDP during the same period moved in the range of 4-5 percent. Last year, India reportedly spent $51 billion (2.3 percent of its GDP) on its military. Pakistan spent $9.5 billion (3.4 percent of its GDP) on its military in the same period.
In his address General Bajwa presented a balanced opinion on the key economic challenges faced by Pakistan, the achievements made and the opportunities available. He underlined the fact that Pakistan's tax-to-GDP ratio is abysmally low and needs to improve if we are to break the begging bowl. While the country's economy is showing mixed indicators and the growth has picked up, the debts were sky high. He said infrastructure and energy have improved considerably, but the current account balance is not in Pakistan's favour.
The stability of a nation's economy is the best guarantee of its sovereignty. The USSR had no dearth of armoured divisions but it broke up because of its weak economic base, he reminded the audience. Similarly, he said, rich countries without a corresponding security apparatus can invite foreign aggression. Pakistan is situated in one of the most volatile regions of the world, he said, and it is dealing with multiple crises since its inception, but this is increasingly so in the last four decades. Therefore, he said, we must be able to evolve on the way.
Pakistan has to continuously ensure a viable balance between the economy and security. "Only then will we arrive at a future that ensures sustained peace and happiness for our people," he added.
Discussing the dynamics of CPEC, the army chief said the China Pakistan Economic Corridor is the future of the Pakistani people and there would never be any compromise over it. "This is the future of our people, a vital national interest on which we will never compromise, regardless of the loudness of opposing voices," he said.
The army chief said that CPEC is not just a collection of infrastructure and power projects but a complete development platform that has the potential to act as a powerful springboard for shared development in the entire Central Asia-South Asia region. "It is also an example of regional cooperation and a break from politics of confrontation. We want all to benefit from this project," he said.
It is a significant message to the world that CPEC is here to stay, which echoes the determination of China regarding CPEC, he said.
The CoAS addressed the security challenges confronting the nation. Challenges to the state's writ have been defeated, though residual threats still remain, he said. The situation is stable but there is apparent fragility at places the army chief said. Therefore, "we need a comprehensive effort to pursue the National Action Plan and remove vulnerabilities well before they turn into threats."
The army chief said Pakistan had a belligerent India to its east and an unstable Afghanistan on its western flank. He said the region remained captive to the historical baggage and negative competition.
"Today Pakistan is a strategically-challenged state and external actors are attempting to assert control and dictate its security priorities that have strong linkages to its economic future. The centrepiece of that effort was CPEC," he added.
(The writer is former President of Overseas Investors Chamber of Commerce and Industry)