Connect with us

Economy

The Economic Quandary of Pakistan: Following the Footsteps of Sri Lanka?

Published

on

The Sri Lankan politico-economic crisis is an apt modern-day case study of epic proportions. Economic mismanagement, familial political hierarchy, and clueless policymaking have dealt this daunting reality to the island nation. A cursory review of the situation suggests that this debacle was waiting to wreak havoc for years. However, a comprehensive analysis uncovers an intriguing pattern of mishaps that actually hastened Sri Lanka’s downfall. That pattern, somehow, carries an uncanny resemblance to the recent turn of events in Pakistan. Thus, the direction of Sri Lanka’s current misery could foreshadow the nightmare in store for Pakistan.

As I’m writing this article, the on-ground political chaos is running parallel in both the Asian underdogs. Protests are rampant, violence is reining on the streets, and stability is nowhere in sight. In the past few months, both countries have followed an identical playbook on the political front – to the letter! The No-Confidence motion against Imran Khan disillusioned his allied parties in a heartbeat. In mere weeks, Khan lost his hairline majority in the parliament. The subsequent fiasco eventually climaxed in Khan’s exit and a regime change. In a parallel setting, extreme public pressure and mass protests distanced the coalition partners from Gotabaya Rajapaksa’s ruling party. In early April, all 26 members of the Sri Lankan cabinet resigned en masse. Rajapaksa’s simple majority of 113 faltered in the parliament as more than 40 members of the ruling coalition rejected his proposal of a ‘national unity government’ under his leadership. Country-wide protests and a brutal state of emergency ultimately led to the unexpected – the resignation of prime minister Mahinda Rajapaksa from the office. Now, both nations are in political limbo – one led by an isolated president while the other ruled by a coalition of fraying parties. Making matters worse, economic desperation is weighing heavily on the backdrop of the ongoing political turnover.

The economics of the two nations – unlike the political drama – varies to a certain extent. Sri Lanka’s tread toward instability started shortly after 2015. The Central Bank of Sri Lanka (CBSL) began engaging in Keynesian fiscal stimulus policy. By cutting interest rates and printing more money to close the output gap, the CBSL triggered an artificial forex shortage by using domestic savings to artificially boost the national credit system. This un-anchored monetary policy swelled the budget deficit and ushered three subsequent currency crises. While the strategy helped push inflation and spark ephemeral growth, low-interest rates and massive devaluation of the Sri Lankan Rupee (SLR) ultimately dried up the forex reserves. Today, Sri Lanka’s usable dollar reserves amount to just $50 million – not enough to meet even a couple of weeks’ worth of imports. Meanwhile, the SLR has dramatically plunged by more than 60% against the greenback. Debt servicing aside, the country is unable to import even food essentials, fuel, and medicines. That is a recipe for a humanitarian crisis waiting to unfold.

Pakistan has similarly witnessed a sharp decline in its dollar reserves in the current fiscal year. From the record high level of $20.15 billion in August 2021, the forex reserves held by the State Bank of Pakistan (SBP) have shrunk by 50% to $10 billion. The main culprit is the intermittent debt servicing cost without matching investments to offset the decline. However, unlike Sri Lanka’s interventionist soft-pegged exchange rate regime, Pakistan has rightly followed a clean float mechanism at the behest of the IMF conditions. While the Pakistani Rupee (PKR) has devalued by almost 100% in the last five years, the currency is not artificially supported. In fact, the Pakistan Real Effective Exchange Rate (REER) – PKR exchange rate weighted against a basket of 37 currencies of major trading partners – is settled in the 95-100 range: a level that makes exports more competitive and discourages imports. Unfortunately, Pakistan’s imports are predominantly price inelastic, while quality exports are not nearly enough to cover the deficit. Hence, borrowing costs have consistently surged to finance the growing import bill – making Pakistan one of the highly indebted countries in South Asia.

The final economic showdown in Sri Lanka was ironically shrouded in disguise of public welfare. The promise of a populist tax cut by the incumbent president Rajapaksa won him the election, yet also chanted a death spell on the economy already on the brink of collapse. A reduction in value-added tax from 15% to 8% with no alternate revenue replacement strategy understandably backfired. As revenue collection plummeted and the budget deficit expanded, the Sri Lankan regime revisited the original playbook – print more money. Moreover, the incompetent government banned crucial imports like fertilizers in order to conserve dollar reserves – sparking a domestic food crisis in hindsight. The pandemic unveiled the strategic idiocy of Sri Lanka as inflation spiraled, revenue from tourism vanished, and unemployment gripped like a vice. The invasion of Ukraine further debilitated the economy as global energy (and commodity) prices skyrocketed. As of April, inflation in Sri Lanka was as high as 29.8%, while food inflation climbed to almost 47%. Fuel prices have more than doubled, resulting in severe diesel shortages and power cuts. Today, Sri Lanka’s sovereign debt default, a shortage of staples, and a dearth of dollar reserves – all elements serve as a reminder to Pakistan of what could be down the rabbit hole.

Despite the possibility of a loan rollover from friendly countries, Pakistan is in desperate need of the resumption of the Extended Fund Facility (EFF) of the IMF program. Pakistan is scheduled to repay maturing bonds worth $4.5 billion by the end of this fiscal year. While, unlike Sri Lanka, Pakistan is not facing a prospect of a loan default – at least not in the short run – Pakistan’s Eurobond yields have dramatically surged to 27% in the secondary market, signifying the increasing market sentiment of Pakistan’s default risk on repayments of maturing global bonds. That being the case, other economic perils could further accentuate doom for Pakistan’s precarious economy. According to the data published by the Pakistan Bureau of Statistics (PBS), the Consumer Price Index (CPI) measured the inflation rate surged in April to 13.4%. Food inflation clocked to over 17% in 2022 – after averaging 6.78% from 2011 to 2022. Despite a commendable growth of 25% in exports in the first ten months of the current fiscal year, imports more than doubled due to inflated global oil and commodity markets. Consequently, Pakistan’s trade deficit crossed the $39 billion mark during the July-April period. A consistent inflow of record foreign remittances has suppressed the current account deficit to almost $14 billion in the same period. However, as the import bill is weighted heavily in fuel costs, the current account deficit would likely tilt toward $20 billion – about 6% of the national GDP – by the culmination of this fiscal year.

Sri Lanka has already defaulted on its $51 billion foreign loans, and the IMF restructuring is underway to stabilize the economy. Sri Lanka is seeking $4 billion in a bailout package. And benefactors like India and China have stepped forward to extend credit lines, defer import payments, and even help alleviate the shortage of essential goods. However, the political vacuum and a lack of systemic governance would continue to asphyxiate the economy in spite of generous aid packages. On the other hand, Pakistan has accumulated record borrowings worth almost $50 billion during Khan’s 45-month stint in power. Fortunately, the regime change in Pakistan has forestalled the impending collapse. Nonetheless, strict reforms and sensible economic policies are the need of the hour.

In the short run, the remaining fuel subsidies – running worth billions of rupees per month – should be withdrawn immediately. As the currency depreciates organically, luxury imports should be further regulated, while value-added exports should be subsidized. The budget deficit is already running between PKR 5 trillion to PKR 5.6 trillion – beyond the budgetary target of PKR 4 trillion for the entire fiscal year. Hence, the government has resorted to borrowing – via floating Eurobonds and Sukuks in the international market and floating treasury bonds in the domestic markets. Yet, record-high yields in the secondary market have severed any immediate relief to the cash-strapped government of Pakistan. To avoid a trail towards default, Pakistan should rather focus on expanding the national tax base, suspending frivolous tax amnesty schemes to the elite industrialists, and curtailing interest rate payments by lowering the benchmark interest rate – currently hovering at 13.75%.

In the last three decades, investment in both public and private sectors has consistently declined in Pakistan. Exports have more than halved while imports have multiplied. However, in just last six years, foreign debt has expanded by 200%; debt servicing costs have surged by 250%. The sheer imbalance should be an eye-opener for the policymakers of Pakistan. Almost 78% of Pakistan’s federal tax collection is expended on servicing external loans. The country is not just in need of the IMF program; it is highly dependent to meet public expenditure targets. Hence, in the long run, Pakistan should focus on bilateral trade and Foreign Direct Investments (FDI) instead of abnormal external borrowing. Remittances should be earmarked to service external debt instead of importing luxuries. Furthermore, subsequent governments should prioritize food security through quotas and price caps instead of subsidizing squandering industries. Development of efficient oil refineries and enhancement of production capacity should also be prioritized to gradually phase away from expensive imported refined petroleum products. Ultimately, it is not too late for Pakistan. However, without any substantial intent toward improvement, continual heavy reliance on IMF and China, and procrastination of much-needed reforms – I reckon we are heading on a parallel Sri Lankan trajectory.

The author is a political and economic analyst. He focuses on geopolitical policymaking and international affairs. Syed has written extensively on fintech economy, foreign policy, and economic decision making of the Indo-Pacific and Asian region.

Continue Reading
Comments

Economy

The Policy of Sanctions and the Golden Horde Legacy

Published

on

The modern policy of sanctions resembles, to some extent, the management practices of the Mongol Golden Horde. One of its elements was a system of labels (jarligs), orders, or permissions that were issued by the khan to his vassals. We remember well from history textbooks about the jarligs which were issued to rulers, that is, the permission the khan granted to the Russian princes to own this or that land. Jarligs were also issued to the clergy, freeing them from taxes or giving them other privileges. The jarlig was an instrument of imperial policy, fixing the decisions of the khan in relation to rulers or institutions dependent on him. It had a transboundary character, that is, it was a tool for managing a subordinate, but at the same time alien territory. On the one hand, it was the property of the khan. But on the other hand, it was a separate state unit. Historians have traced the subsequent influence of the Horde’s legacy on the formation of a centralised Moscow state. 

For example, the historian Georgy Vernadsky underscored such an influence. It would seem that it makes sense to discuss Horde practices in relation to Russia, pointing to the “Asian” nature of its political power, its despotism and excessive concentration of power. A similar narrative, in one form or another, has been developing for centuries among Russia’s Western neighbours. However, some imperial practices appear to be universal. Today they can be observed in US policy and, to some extent, in the policy of the European Union. Russia itself has largely lost its imperial heritage, becoming a nation-state even to a greater extent than its Western rivals. Which, of course, does not preclude a transition to an imperial organisation in the future under certain circumstances.

The characterisation of the modern US and EU as empires gives rise to two risks at once. There is an intellectual risk, associated with the obvious differences between the empires of the past and modern political entities. In many respects, they are simply incomparable. The comparison of modern industrialised mass democracies with the despotic and economically primitive empire of the Mongols is sure to prompt indignation among some and a condescending smile from others. The Americans and Europeans themselves created the idea of regulatory risk. For all the differences between them, the Western states are defined by their belief in the free organisation of their political institutions, which precludes violence or coercion. Their political communities are organised voluntarily, unlike the empires of the past, which were organised on the basis of violence and coercion. 

The American and European identity is grounded in the idea of the superiority of the political governance they created. It seems to be the most fair from the point of view of the equality of people in their rights, as well as the freedom of citizens within the limits of the social contract. The “significant others” for such an identity are both the despotisms of the past and some modern states that rely on autocracies. First and foremost, these include Russia and China. The superiority of capitalism and the market is also part of the Western identity. It is opposed to non-free economies, in which the state plays a key and directive role. From a normative point of view, calling the US and the EU empires would be almost tantamount to a political provocation.

Nevertheless, such a thought experiment seems justified, especially since it reflects certain intellectual developments. Among others, we can recall, for example, “Empire” by Michael Hardt and Antonio Negri. This experiment posits two assumptions. The first is that in modern international relations, inequality and hierarchy are preserved, and are determined by differences in power, economic and human potentials. The second is that the voluntary nature of an organisation does not exclude coercion and domination. The softness of politics in comparison with the empires of the past hardly indicates the absence of coercion and domination as such. In addition, the democratic structure of individual states does not exclude coercive relations between them, not to mention relations with other states.

In the 20th century, the United States was indeed able to create a unique international community that could be called a “soft empire”. At its core, no doubt, was an instrument of force and coercion. It took shape as a result of the Second World War, in which the United States, together with its allies, defeated and then occupied a number of large states (Italy, Germany, Japan). Much more important, however, was the economic, technological, and financial superiority of the United States. America became the most important source of reconstruction of post-war Europe and Japan, which later became major economic players. The United States not only did not interfere with their development, but also benefited from it. During the Cold War with the USSR, a Euro-Atlantic community system was formed, in which the United States dominated both militarily and economically, avoiding excessive control and coercion. Such control, however, was characteristic of the USSR’s relations with its allies in Eastern Europe, despite the fact that the Soviet economic base turned out to be noticeably smaller than that of the United States and its European allies. The differences between the Western and Eastern blocs in terms of the level of coercion employed during the Cold War, made it possible at the ideological level to underestimate its presence in the ranks of the former and exaggerate in the ranks of the latter. 

The movie epic Star Wars in the late 1980s became a kind of archetype for mass consumption, illustrating the differences between the two systems. The victory in the Cold War and the collapse of the Soviet bloc can be considered the pinnacle of the development of the American “soft empire”, and globalisation, which gained momentum in the late 20th and early 21st centuries, when it peaked.

Europe, in turn has developed its own “soft empire”, fundamentally different from the United States, but at the same time closely connected with it. It was never based on military-political coercion. The European Union, which was established to facilitate economic integration, created its “universe” through the establishment of common standards and rules of the game, which were accepted by its members voluntarily. However, over time, the European project acquired a growing political component. So far, it has been insignificant as a military-political player, remaining a junior partner of NATO. However, through the strength of its standards, rules and bureaucracy, the EU has established a relationship of power and coercion with its member states and in the orbit of its economic influence that is no less effective than the use of force.

The financial and economic power of the US and the EU is one of the factors that allows their “empires” to remain “soft”. The United States retains its role as a global and financial leader. The American dollar is a convenient and efficient instrument for international settlements. The EU is a large market, and the euro has also taken on a prominent role in international finance. Of course, the humanism and “softness” of Western “empires” have had their limits. Whenever the use of force was relatively unhindered and technically possible, it was employed quite harshly. This was evident in the defeat of Yugoslavia and Iraq. Against Iran, however, the possible use of force ran into the prospect of much larger losses. The use of economic measures made sense as a cheaper, but at the same time devastating alternative technique for using power.

Economic sanctions can be considered the key technology of the modern “soft empires”. The US is far ahead of the rest of the world in their application, although the EU is also using them to a growing extent, and the UK has incorporated them into its independent foreign policy post-Brexit. The global nature of dollar settlements allows the US financial authorities to track transactions around the world, restricting them where they conflict with political interests. In a global economy with a US-centric financial system, blocking US sanctions is likely to result in extensive losses or even spell ruin for any large company with an international presence. The use of blocking sanctions to target strategic exporters can cause enormous economic damage to the economies of individual countries; this has been aptly demonstrated in the use of sanctions against Iran, Venezuela and Russia. The use of secondary sanctions, as well as fines and criminal prosecution for violating US regulations, has led to businesses being disciplined, regardless of their country of origin. For example, the Chinese authorities condemn the US sanctions, but Chinese companies have been forced to take them into account and generally avoid violating them, fearing financial losses and the loss of the US market. Until February 2022, Russian big business also attempted to avoid violating the US sanctions regimes, even though Moscow officially condemned their use, and Russia itself had been hit by a number of restrictive measures. European businesses have also been hit hard by US fines and are complying with US regulations despite Brussels’ grumblings. The European Union itself is actively developing its own tools and restrictive measures.

The modern policy of sanctions also gives rise to the reincarnation of the practice of issuing “jarligs”. By imposing restrictions in a particular area, the US Treasury can, for example, issue a general license that allows certain transactions. Similar permissions are possible in the policy of the European Union. Two recent examples illustrate the use of “jarligs” vis-à-vis Russia.

The first example is the situation with food exports from Russia. Formally, the United States did not impose an embargo on the export of Russian grain, fertilizers or agricultural products. However, a number of Russian agribusiness assets have been hit by blocking sanctions. Fearing secondary sanctions and fines amid large-scale financial and economic sanctions against Russia in the wake of the outbreak of the military conflict in Ukraine, foreign banks have refused to conduct transactions involving export deals for Russian suppliers. For similar reasons, shipping companies have refused to ship Russian products. Combined with the difficulties affecting Ukrainian food exports due to hostilities, rising food prices, droughts and other factors, restrictions on Russian supplies have threatened to have serious global consequences. The answer was the “jarlig” of the US Treasury in the form of a general license for transactions involving Russian food.

The second example is that of Lithuanian attempts to partly block Russian transit to the Kaliningrad region. EU sanctions prohibit the import, transportation and transfer of a number of Russian goods. Under this pretext, their transit through Lithuania was blocked. In this case, the “jarlig” had already been issued by Brussels, which specified that the sanctions do not apply to the transit of these goods by rail.

In the context of the sanctions tsunami, Russia will have to face the good old practice of bans and “jarligs”, recalling the experience of the Horde. The “jarlig” will be issued where the interests of the initiators of the sanctions so require. They can also be given out as rewards for “behavior change”. Ultimately, in the modern doctrine of sanctions policy, “behavioral change” is one of the main goals. Accordingly, Russia can either continue to rely on “jarligs” or create conditions under which foreign restrictions can be circumvented. In relation to the aforementioned example with food exports, we could talk about a system of financial settlements with consumers of Russian exports independent of the control of Western authorities and an accelerated build-up of our own merchant fleet. With regard to Kaliningrad transit, this means the development of maritime transport to the Russian exclave. Such measures will require investment and political will. The alternative is dependence on “jarligs” that can be issued today and revoked tomorrow.

The experience of the Golden Horde, like many other empires, is that “jarligs” lose their meaning when the mass of players who ignore them becomes critical. Western “soft empires” continue to retain a large margin of safety. However, the resistance of major players like Russia may gradually undermine their dominance. Involving China in the process will pose an even more serious challenge to the “soft empires”. China’s policy will be extremely cautious, but the experience of an economic attack on China during the presidency of Donald Trump in the United States has already forced Beijing to take measures to ensure its economic sovereignty and develop insurance mechanisms for use in the event of inevitable exacerbations. So far, China puts up with “jarligs” for its large companies. However, the question is, how long will such humility last?

From our partner RIAC

Continue Reading

Economy

Another Sri Lanka?: Pakistan’s Economic Crisis

Published

on

Pakistan’s Finance Minister, Miftah Ismail warned of “bad days” ahead as he highlighted the looming economic crisis that the nation finds itself in. Addressing a ceremony at the Pakistan Stock Exchange, the Finance Minister blamed the economic policies taken by the erstwhile Tehreek-e-Insaf government for the dire economic state of the country.

A Nation in Crisis

Pakistan’s foreign-exchange reserves have shrunk by more than half in the past year, to just over $9 billion, or about six weeks’ worth of imports. In 2022, the Pakistani rupee has lost about 30 percent of its value against the US dollar. Furthermore, a rise in inflation and unemployment coupled with political instability has only made matters worse. The three major global rating agencies, Moody’s, Fitch, and S&P Global have downgraded Pakistan’s long-term rating from stable to negative, citing the country’s deteriorating economic position.

The current Pakistani government has blamed former Prime Minister Imran Khan for much of its economic woes. These accusations are not entirely unfounded. While he promised to rid Pakistan of its economic troubles, Mr. Khan failed to deliver. His regime saw an increased rate of inflation and widespread economic mismanagement. By March 2022, the country’s total external debt and liabilities reached $128 billion. Unemployment also surged with Pakistan Institute of Development Economics (PIDE) reporting 31% of the youth to be unemployed. The sudden dissolution of his government added fat to the fire, leading to political instability amid grave economic troubles. However, with a tenure of less than five years, blaming Imran Khan for all of Pakistan’s economic troubles seems far-fetched. Undoubtedly, the economy suffered under the Khan administration but this crisis stems from a much larger flawed system.

Economic Fault Lines

There are various structural flaws that can be located in the Pakistani economy that have time and again led to its unmaking.

The Khan administration is not solely responsible for the ongoing debt crisis. The IMF has provided loans to Pakistan on twenty-two occasions since 1958, imposing 13 Structural Adjustment Programmes (SAP). The focus of these programmes has been to stabilise the economy while sacrificing growth in the short term. However, Pakistan’s growth rate has consistently remained the lowest in South Asia since the introduction of the first SAP in 1988. The sustainability and feasibility of these IMF bailouts have also been brought into question considering the frequent visits Pakistan makes to the IMF requesting for bailouts. For instance, the last bailout Pakistan requested was in May 2019, just three years before the current crisis. Furthermore, the China–Pakistan Economic Corridor (CPEC) created a debt of $64 billion for Islamabad which was originally valued at $47 billion in 2014. The excessive borrowing to resolve short term issues has majorly contributed to Pakistan’s economic troubles.

Another major issue with the Pakistani economy is the huge trade deficit that the country incurs. Pakistan’s trade deficit currently stands at $48.66 billion, a record high. This enormous trade deficit has resulted from lack of exports in the face of steadily growing imports. As the industries fail to meet the requirements of the domestic market, Pakistan has to rely on imports for bridging the gap. Similarly, the exports suffer due to low productivity of agriculture and industries. According to the International Labour Organisation (ILO), Pakistan is ranked 143 out of 185 countries on labour productivity, having its GDP per hour worked at a measly $6.3.

Poor fiscal management and failure of the private sector to adapt to innovations has further shackled the Pakistani economy. All of these issues have contributed to the ensuing political instability.

Another Sri Lanka?

The past few months have witnessed the collapse of Sri Lanka from one of the top performing economies in South Asia to its descent into anarchy. With Pakistan in a similar crisis, it is widely argued that the country might be on its way to follow the island nation into a harrowing economic collapse. With the fate of Sri Lanka at display, it is also feared that escalating political instability might lead to an eventual military rule, as has been the norm in Pakistan.

While the situation is bad and might worsen in the coming days, Pakistan is unlikely to follow the Sri Lankan trajectory. The revival of a 2019 bailout with the IMF on July 13, clearing the way for about $1.2 billion, comes as a relief for Pakistan. This much needed help will allow the country to look for alternative channels to bridge the financing gap. The Pakistani military has also been playing an active role in stabilising the situation, with Army Chief Qamar Bajwa seeking financial help from friendly countries including UAE and Saudi Arabia. The involvement of such external lenders should discourage major creditors like China from requesting immediate repayments, easing the pressure on Islamabad. However, this requires the Pakistani government to keep a check on the steadily increasing imports.

While the present measures are likely to provide respite for now, even in the unlikely scenario of a Sri Lanka-like complete economic collapse, the military would not let the political situation in Pakistan slide into anarchy and is likely to take over by dissolving the government in the worst case.

The Way Ahead

Even though Pakistan might just evade the crisis through IMF involvement and bettering the trade deficit by curbing imports into the country, these are measures that tend to serve short term purposes and are no guarantee against another similar crisis in the coming years. The only sustainable answer would be initiating structural reforms. A self-sufficient economy must be at the heart of a rebuilding project. Increased productivity will facilitate an increase in exports while decreasing the imports on basic commodities like food and medicines. Finding economic stability is also detrimental to which path Pakistan’s politics will take in the future as the shadow of military rule looms large on the dwindling democratic set up which has managed to keep it in the barracks since 2008.

Continue Reading

Economy

What Is Stopping Economic Development Across The Free World?

Published

on

Notice the big events of economic booms during the last century and observe the unique role of mobilization of entrepreneurialism on such trajectories. For example, the original Silicon Valley of the USA was not a technology or financial revolution but the mobilization of an entrepreneurial journey, way before the term ‘IT’ became popular, and ‘technology’ conceptualized as worthy enough to trade in billions while staying invisible. The out-of-box thinkers came out of their garages, broke old systems, created new alternates and changed the world forever. Revolution of entrepreneurs, created by entrepreneurs and for entrepreneurs. The rest is history

Today, some 100 other nations are still trying hard with their own version to become the copycats. The existing lukewarm failures around the world on the replications of “silicon valley” of sorts, already speak volumes. Remember, only measured by entrepreneurialism, such goals, unless once Mindset Hypotheses properly understood this entire subject already beyond common narratives on economic growth.

Real economic development always needs methodical advancements of national mobilization of entrepreneurialism, upskilling and uplifting SME sectors to quadruple exportability otherwise, growth and productivity remain stagnant.  The big challenges are to bring the entrepreneurial thinking and job creator mindsets blend across the economic development teams on a fast track basis. Their current frame of mind critically needs uplifting so their confidence level stands up to the global quality, demands for speed and execution able to tackle the power of global competitive forces.  

Neither across the world, during the entire last decade, did academia build neither the long awaited Fourth Industrial Revolution nor did the bureaucracies digitized, mobilized and uplifted SME economies. Where is the entrepreneurial mix in all such equations? What have the economic development teams really learned recently?  When will they get ready to advance their thinking and blend their efforts alongside the entrepreneurial engines and right mindsets?

When 100 plus nations, talking about digitization, are still trying to figure out mobilization of large sectors of their SME economies, with little or no progress, lingering questions arise. Necessitated now, are some newly mandated activities at every stage of any economic development in progress. Identify and rearrange right mindsets, for right challenges. What worked, last many decades, today, with no results, now ready for thrown out of windows? How long unlimited printing of currencies last, how high will inflation go and how long the recessions last?

The post-pandemic technologically advanced world,  Best option is to balance mindsets and cause change, adjust to global age demands on productivity and performance, otherwise accept a diaper change, surrender to face frailty of life and limits of minds. It is not the absence of expertise that is a problem, it is the mindsets unable to recognize such expertise, in the first place.

The invisible switch: There is no political power unless there is a parallel economic power; after all, there cannot be any economic power without entrepreneurial job-creator-mindset power. Economies without digitization are as if without electricity, economic development without upskilled frontline teams as if without a bulb. Study the solutions via Mindset Hypothesis

The 4B factor: Four Billion on the march; billion displaced due to pandemic, billion replaced due to technology, billion misplaced in wrong jobs now a billion on starvation-watch. The 4B Factor, this digitally connected mass of people making this now the biggest force of global opinion in the history of time.

Global opinion v/s national public opinion: Observe, how fast the world changed, how the ocean of global opinion is now drowning ponds of national opinion. Notice, nations are already so intoxicated, in joy over the popularity of their own national opinion, while having just an opposite global opinion on the world stage. Study the global tidal waves.

Study the Agrarian Age to Industrial Age, later to Computer Age, measure how most talented ‘cow-hands’ were suddenly replaced by steam power and hydraulics and later floors filled with clerks replaced by a single computer. Study “How did we arrive here so suddenly” Excerpted Source: Naseem Javed, Sunrise, Day One, Year 2000. Published, IABC Communications World, Dec. 1995, Volume 12 Issue 11, Article, ‘Chronology Charts’

Over centuries, despite, available like an open book, the government failed to create armies of entrepreneurs but was always successful in creating real armies and real combat soldiers. Simply because, soldiers trained by sleeping in the forests while digging trenches in the rain, but not trained by running around in classrooms with water pistols or drawing pictures of tanks. 

Entrepreneurialism is neither academia born nor academic centric. Let the professors teaching entrepreneurialism break the furniture in protest, their contributions, as theories are excellent only when free, but not for heavy cost and creating student debts. Today business education is more a liability and no longer a real asset. The world changed, minds opened, old-systems closing, new worlds arising with new definitions erupting to manage the future better.

Go build an airline, place aeronautical engineers, and frequent flyers in the cockpits but leave qualified trained pilots in the airport lobbies. Now glued to the radio to find about a crash understand the similarity to current pending financial crashes, nation by nation. As a test, best check out what percentage of entrepreneurial job creator mindsets are in the mix with job seeker mindsets of any local, national economic ministry anywhere in the free world.

Save economies and grab the solutions: They can rapidly upgrade and acquire Mastery on National Mobilization of Entrepreneurialism,learn its pragmatism and common sense deployments within months, acquire digitization, mobilization and most importantly to articulate on such advanced new thinking across the national agenda. Learn fast, fail fast, raise fast and shine. Study how Expothon is tabling such ideas globally. 

Today, a shipload of some 7000 economic development officers, representingalmostthe total of top teams spread across free economies of the world should now take a luxury cruise, relax, relearn, unlearn, as their current mathematics is causing serious maladjustments on creating grassroots prosperity for some 100 nations. How fast can this force of 7000 people on a luxury cruise be upskilled on National Mobilization of SME Entrepreneurialism?

The difficult questions: How quickly options when infused with technology lead to mobilizations to discover new paths. Which economic leadership of free nations can display such transformation or even articulate on such critical topics? Which national or global institution is bold enough to face and debate such challenges? Which economic team is ready to test, explore, or try on such forbidden topics? Nevertheless, the world changing fast and will not stop for anyone.

Observing the change, it will not be the sudden arrival of missed Fourth Industrial Revolution; but the surprised arrival of the First Industrial Revolution of the Mind. Study deeply how the mind is opening up and responding to creative entrepreneurial issues, the old concept already dead, now replaced with new thinking. Leaving behind the woman entrepreneurs is another tragedy for any nation. What are some new solutions

Just like today, we no longer tolerate square wheels or rotary dials, or chasing a form stamped 10 times, across a 10-floor building without a lift. The post pandemic economic recovery in smoke and mirror war games, will no longer tolerate the inefficiencies and bureaucracies. Of course, today, the ability to face the truth now considered extraordinary strength. Change can be beautiful, once minds opened.

Refusing to face the truth; this is where all the hostility and hate breeds,  and where without diversity and tolerance, wars and fakery declared the common games, this is when humankind left as secondary, common good declared waste, societies destroyed, so who needs economic development, anyway? A new wave of grassroots economic development will emerge as the top-level economic development almost already destroyed. Hear the sounds of distant firings. It will be the five billion connected alpha dreamers, who will develop and change the world. The rest is easy 

Continue Reading

Publications

Latest

South Asia4 hours ago

Politics of Pakistan: A Riot or an Opportunity

On 14th August, 1947 Pakistan appeared on the world map as the largest independent Muslim state of that time. Sixty-five...

New Social Compact13 hours ago

COVID- a way forward with Sustainability & Biodiversity

Since the onset of the COVID- 19 pandemic, a new unprecedented situation has arisen many new challenges including social, health,...

South Asia16 hours ago

Seventy-Five Years of India’s Independence

If anyone had asked Jawaharlal Nehru as he made his midnight speech on August 15 and freedom dawned, how he...

World News18 hours ago

‘Immensely bleak’ future for Afghanistan unless massive human rights reversal

The international community must dramatically increase efforts to urge the de facto authorities in Afghanistan to adhere to basic human...

Economy20 hours ago

The Policy of Sanctions and the Golden Horde Legacy

The modern policy of sanctions resembles, to some extent, the management practices of the Mongol Golden Horde. One of its elements was a system of labels...

International Law23 hours ago

What Is a Sovereign State?

Against the backdrop of the rapid collapse of the US-led world order, the question of which states will survive in...

World News1 day ago

IAEA: ‘Very alarming’ conditions at Ukraine’s Zaporizhzhia nuclear power plant

The situation at Ukraine’s Zaporizhzhia nuclear power plant has deteriorated rapidly to the point of becoming “very alarming,” Director General...

Trending