$100bn and Pakistan's absurd game of illusions

We are living in a world of illusions. While the country is fast hurtling towards an economic meltdown, we are told that our bad days are over, with billions of dollars in investment soon expected to be pouring into the country that would change our fortunes.The caretaker prime minister Anwaar-ul-Haq Kakar says that Saudi Arabia will be investing $25bn in the country over the next five years, while the army chief is reported to have reassured a group of businessmen that Pakistan has the potential to attract up to $100bn in investments from countries such as Saudi Arabia, the United Arab Emirates, Kuwait and others to alleviate the suffering of the Pakistani people.The illusionThere is a sense that the army leadership is on a mission to steer the country towards a new era of economic prosperity, by fixing everything — from containing the dollar to stopping smuggling and eradicating corruption in the next few months. medium103458424It believes that the recently formed Special Investment Facilitation Council (SFIC) will be able to bring in investments in the energy, IT, minerals, defence and agriculture sectors. The SIFC structure, which includes the chief of army staff (COAS) as well as other military representatives in key roles, aims to take a “unified approach” to get the country out of the current state of economic turmoil in which it finds itself.However, it appears to be part of the game of illusions long played by our ruling elite. For a number of years, it was the China-Pakistan Economic Corridor (CPEC) that was supposed to be a game changer for the country. But after tens of billions of dollars of Chinese investment, the country’s economic plight has continued to slide. The promise of change never materialised, despite the massive inflow of finances over the years.While the CPEC project at least has something to show for it in terms of some infrastructure and power sector development, mobilising $100bn in investment is a pipe dream, especially as there is no indication so far that the Gulf sheikhdoms have started looking at a country riven by multiple crises as a lucrative investment destination. Notwithstanding some of them acquiring interests in certain state-owned ventures being offered for disinvestment, there is no tangible commitment to invest in new projects. medium103458645But our caretaker prime minister is euphoric about the prospect of $25bn in Saudi investment coming in various sectors, particularly in mining, agriculture and information technology, in the next two to three years. One can only wait to see such a wonder happening that could change the fortunes of a country struggling to keep itself afloat amid a massive foreign debt burden and looming stagflation.Curiously, the civil and military leadership never gets tired of hyping Pakistan’s rich untapped mineral resources. Their latest estimate is that the country is sitting on precious minerals valued up to $6trn. One former minister in the previous government got very excited during a TV talk show, claiming that the amount was only the value of the "dust" and the real worth of the untapped minerals was far more. There is no limit to such absurdities that come in plenty, even at a time of extreme gloom.Same old storyIt was not surprising that the pep talk delivered to the select group of businessmen leaked to the media has evoked a mixed response. Some elements in the media were quick to eulogise the COAS for "leading from the front" in a bid to take the country to economic recovery.However, past experience has taught us that it has been a norm under successive hybrid set-ups for the military leadership to be involved in matters ranging from governance to economic policies. The latest example is the SIFC, mentioned earlier, with considerable military representation, formed under the Shehbaz Sharif government as a one-window operation to facilitate foreign investment in the country. medium103459127Indeed, we have seen such involvement in the economic policymaking process quite a few times. The hybrid administration under former prime minister Imran Khan in 2019 had established the National Development Council with the aim to spur economic growth. One of its members was the then army chief Gen Qamar Bajwa. Very little was heard of the body that had hardly anything to show for the revival of the economy.But the current military leadership’s involvement in matters of economic and investment policymaking process under the interim administration has reinforced apprehensions about the establishment’s long-term agenda. There is no ambiguity left now about who is in charge.No incentive to investThe most worrying aspect, though, is the misplaced expectation of massive inflows of foreign investment. One cannot deny the importance of a unified approach and the removal of bureaucratic hurdles in order to facilitate much-needed foreign investments in the country. But far more is required to create an atmosphere to give foreign investors some confidence in conditions here.Crucial to this situation is a conducive economic and political environment for foreign investors to come. It is not goodwill alone that will lead Gulf countries to invest here. What we need is to carry out long-pending structural reforms to stabilise our economy which has been in the ICU for a long time. The countries which have attracted foreign investments have first fixed their economies and then have developed strong domestic investments.A sick economy provides no incentive to attract domestic or foreign investors. Wishful thinking cannot bring in investors. How can we expect foreign investors to come in a situation where domestic investment has been falling? The potential mineral deposits have been known for decades but could not be tapped, not only because of lack of will but also because of political and security reasons.Foreign investment will come when the economic fundamentals are in place and security for investment is guaranteed. It’s not enough to have a “unified approach”. With the prevailing political and economic uncertainty, there is hardly any hope of any kind of investment flowing in. The biggest obstacle in the way of foreign investment is the deteriorating law-and-order situation, particularly in the regions which are believed to have the major deposits of minerals.Surely, we badly need investments to make the country stand up on its feet. But for that, we need to emerge from our state of illusion and confront the reality. There is no magic wand the security establishment has to fix our chronic problems within months.The story was first published in the Dawn on September 6. Republished with permission