Dollar Fiasco and The Common Man

In a time where uncertainty prevails the finance markets of Pakistan, the idea of having a logical and pragmatic approach is fairly difficult to fathom. The uncertainty coupled with the uncalled-for sale of personal reserves of foreign currencies in the name of patriotism by some “self-proclaimed investment gurus” results in the common man finding himself in a dilemma yet again. A reasonable understanding of the monetary policy and short-term economic history clearly tells that any irrational decision taken in the pretext of patriotic presentiment has hardly yielded any meaningful outcome to say the least. Contrarily, any such impulsive sell-offs are always welcomed by the “big players” of the market who are lining up for a greater play by hoarding and taking up long positions for artificial shortage and further devaluation.

           The elephant in the room is still not addressed. How to contribute towards the betterment of economy and play a part in putting out the fire? For the purpose of comparison, we need to look at one of neighbors which was also granted the economic status of “Most favored nation” not so long ago.

           In 2014 with a backdrop of post-election India, hopes were set high from the newly elected Gujrati PM and people hoped for some magic. A plan that could create more jobs, stabilize economy and bring in FDI. Right then, the ruling party brought in the “MAKE IN INDIA” initiative. Unlike us as we proudly proclaim Pakistan as an agro-based economy (although we aren’t able to develop the infrastructure to store and export most of our agricultural produce to the nearby Gulf States), the Indian PM clearly understood that focusing on raw and unprocessed goods isn’t going to be sufficient to cope with the economic challenges faced of the 21st century. His idea was simple yet effective enough to strike the right chords of patriotism with the public (and capitalism for the investors). By outlining 25 manufacturing and service sectors including automobiles and its components, biotechnology, food processing, renewable energy, IT and a rapidly developing sector of mental wellness, he mainstreamed the idea of secondary and tertiary industries. To counter the critics who were developing a conjecture of poor production quality and adverse environmental impacts (as associated with all industrialization regime in third world countries), a key phrase of “zero defect and zero effect” was campaigned for. With investments from well-known global companies such as Micromax, Huawei, LH Aviation, Foxconn, Samsung and General Motors in the upcoming months, it won’t be wrong to say that the initiative was fairly successful. However, the greatest benefit doesn’t lie with the FDI received.

           With the influx of FDI, India also received a fair amount of technology, exposure into global markets and development of its local manufacturers and budding entrepreneurs. The trickle-down effect of gradual increase in consumption of local goods and increasing exports   along with FDI led to the fact that over the course of past 5 years, even though the total imports increased from 37 billion USD to 42 billion USD per annum approximately, the INR depreciated by only 10 Rs against the USD.

           The mammoth task of restructuring Pakistan’s economy is not a simple one. Needless to say, the days ahead aren’t the optimal ones to look forward to, however, it could be a blessing in disguise if the steps taken are in the right direction. Changing stereotypes about locally manufactured goods (specifically appliances and cars), introducing anti -dumping policies, producing cheaper alternatives, investing in R & D to improve quality levels and developing storage facilities to reduce agricultural wastages could be some starting points. Engineers, researchers and innovators are to play a key role to capitalize this opportunity, I would say.

           Without disregarding the viability of the aforementioned steps, this whole idea will still be worthless if not backed by the government on a national level. The crucial factor was and has remained to be the change in perception of the masses. The acceptability of the “Made in Pakistan” initiative, the refinement of the product quality and the last but not the least local businesses actually providing a solution to the local consumers rather than banking mercilessly on their period of turmoil is what is the need of this hour.