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World Bank asks Pakistan to invest in Human Capital

But first, a look at the recent visit of Prime Minister Imran Khan to Washington DC

Venkat Raman

As stumps were being drawn at the end of the highly publicised visit of Pakistan Prime Minister Imran Khan to the US, commentators were looking at the scoreboard to see whether the former Cricket Player bowled over political pundits in Washington DC and the occupant of the White House, Donald Trump.

He seems to have, as many wrote in their columns.

But the most significant to date has been that of Michael Kugelman, Deputy Director, Asia Programme at the Woodrow Wilson International Centre for Scholars in the US Capital.

“If we judge the visit by the metric of public diplomacy, and how Khan was received and perceived by his hosts, then the visit was wildly successful. And given how Pakistan’s image abroad has suffered for so long, especially in Washington, one can chalk up the great optics and good vibes to emerge from the visit as a strategic success as well,” he said in ‘Prism,’ a highly readable column in the Karachi-based, Pakistan’s leading daily, ‘Dawn.’

Charmers of Islamabad

Mr Kugelman said that in previous decades, Pakistani leaders often charmed their American hosts and won them over.

“Ayub Khan was frequently feted, including with a New York City ticker tape parade, in America. Richard Nixon was known to be quite fond of Yahya Khan. Benazir Bhutto was a favourite among Washington policymakers. Pervez Musharraf had many friends in this town as well; even in 2011, after his star had fallen, Musharraf attracted a huge crowd of adoring supporters to an address he gave at the Wilson Center not long after US forces apprehended Osama Bin Laden,” he said.

And yet, as Mr Kugelman said, in the post-Musharraf era, Pakistani leaders have not received the treatment in Washington enjoyed by their more popular predecessors, until now.

“Indeed, say what you will about Khan, but Pakistan’s prime minister has energised the Washington officialdom in ways not seen for more than a decade,” he said.

The battles at home

Even as he was scoring well in the official and diplomatic circles of Washington DC, Mr Khan was aware of the challenges that his young government faces at home. Slower rate of growth, fiscal deficit, high inflation, unemployment, growing disparity between the rich and the poor and widening trade imbalances are some of the issues that he confronts as Prime Minister.

Internationally, across borders, Afghanistan has been a major irritant in good neighbourly relations. Mr Khan discussed the issue with Mr Trump but the differences between Islamabad and Kabul should not be underestimated.

Afghans and others

Afghanistan was the sole country to vote against Pakistan when it gained independence on August 14, 1947. Kabul immediately armed separatist movements in the nascent Pakistan And made irredentist claims to large swathes of Pakistani territory, which has thus far prevented the emergence of normalised relations between the two countries.

And Pakistan’s relations with India has never been high.

Since 1947, both countries have been engaged in at least four major wars and several skirmishes and standoffs. There is real nuclear threat although this has never been tested to this day. However, the scare of a major conflict leading to wider ramifications loom large.

Notwithstanding the above, Pakistan should concentrate on its domestic challenges.

World Bank Recommendations

The World Report on Pakistan issued on April 5, 2019 said the country’s economy grew by 5.8% during the financial year ended March 31, 2019 and that growth was driven by higher consumption demand, fuelled by accommodative fiscal and monetary policies; resulting in widening macroeconomic imbalances.

Current Account deficit however rose to 6.1% (from 4.1%), reflecting the growing trade deficit as exports struggled to catch up with steady acceleration in imports due to high domestic demand.

“Fiscal deficit widened to 6.6% (excluding grants), reversing fiscal consolidation efforts made in previous years. The main reason for the fiscal slippage was a large increase in recurrent spending together with low revenue growth (non-tax revenues),” the Report said.

More Work essential 

The World Bank recognised the steps taken by the current government led by Imran Khan (since August 18, 2018) but said that outcomes by mid-year suggested that further adjustments will be necessary.

“Leading indicators for real sector activity suggest a contraction in demand. Large scale manufacturing, which accounts for 65% of overall industrial output, contracted by 2.3% between July-January Financial Year 2019. In agriculture, four of the five major crops have witnessed a year-to-year decline in production, due to water shortages and a decline in production area,” the Report said.

Investment in Human Capital

In another Report, the World Bank called on the Pakistani government to invest more and better in its people, ensuring that they are richer, better educated and healthier when the country turns 100 years in 2047.

Launching the Report at the ‘Human Capital Summit’ held in Islamabad on March 18, 2019,

World Bank Vice-President (South Asia) urged Pakistan to overcome its boom-bust cycles through a deep-rooted economic transformation.

“The World Bank recommends the essential reforms that Pakistan needs now to accelerate and sustain growth. This means increasing and improving human capital investment, boosting productivity, promoting social and environmental sustainability, ensuring good governance, and leveraging its location to connect more with neighbours and the world beyond.  There are steps Pakistan can take today to boost its economic performance and thereby ensure a better future for its people,” he said.

Greatest Asset

Stating that people are the greatest asset of Pakistan, he said that a young population (of million 73 million) can transform the country into a demographic dividend that drives economic growth. To achieve that, Pakistan must act fast and strategically to: i) manage population growth and improve maternal health, ii) improve early childhood development, focusing on nutrition and health, and iii) boost spending on education and skills for all, he said.

The Bank’s Vice-President for Human Development Annette Dixon asked the government to unlock the potential of women in its workforce.

“Because the next generation is meeting only 40% of its potential, Pakistan is foregoing much of its economic growth, but this can change. When women and girls are empowered to make their own decisions, they stay in school longer, they start families a little later, have fewer children, contribute more to the economy, and invest more in their children. It is a virtuous circle that is good for families and good for the whole country,” she said.

Khan’s visit to US

Prime Minister Imran Khan scored well during his visit to USA and meetings with President Donald Trump on July 22, 2019, in what was dubbed as the ‘first such meeting since 2015.’

The two leaders held comprehensive discussions with a focus on building a broad-based and enduring partnership and strengthening cooperation between to bring peace, stability and economic prosperity in South Asia.

Reviewing the progress of the Afghan Peace and Reconciliation Process, Mr Khan reaffirmed Pakistan’s commitment to continue to support the process in good faith.

Later, briefing the media, Foreign Minister Shah Mahmood Qureshi said that Mr Trump accepted Mr Khan’s invitation to visit Pakistan.

“For five years, the top leadership of the two countries had not met. Our country did not have a Foreign Minister and for five to six years we did not have any lobbyists appointed here, all of this led to a vacuum in the relationship between the two sides,” he said.

*

US President Donald Trump with Pakistan Prime Minister Imran Khan and Foreign Minister Shah Mahmood Qureshi at the White House on July 22, 2019 (White House Flickr posted by Dawn).

Imran Khan with Donald and Ivanka Trump at the White House on July 22, 2019

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