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An ‘Asian Tiger’ Agenda for Today’s U.S.-Pakistan Summit
Yesterday, Pakistani Prime Minister Nawaz Sharif told the U.S. Chamber of Commerce that member companies should invest in Pakistan, where global giants like Colgate-Palmolive and Nestlé have made substantial profits. Today, he will meet with President Barack Obama to discuss an economic program to spark Pakistan’s development. This is a nice change of pace from ...
Yesterday, Pakistani Prime Minister Nawaz Sharif told the U.S. Chamber of Commerce that member companies should invest in Pakistan, where global giants like Colgate-Palmolive and Nestlé have made substantial profits. Today, he will meet with President Barack Obama to discuss an economic program to spark Pakistan’s development. This is a nice change of pace from the regular drones/terrorists/Taliban agenda — vitally important as these issues are.
In fact, many of Pakistan’s pathologies — including Army dominance over civilian institutions, poor governance, pervasive insecurity, and the continuing generation and export of violent extremists — would be mitigated if Pakistan’s political class, and the world, focused more intensely on steepening its growth trajectory. Arguments that Pakistan cannot successfully modernize for cultural or religious reasons should be rejected on their face, so diverse have been the developmental success stories of emerging economies in East Asia, Latin America, Africa, the Persian Gulf, Eastern Europe, Southeast Asia, and South Asia.
It is not impossible to imagine Pakistan’s ultimate emergence as an Asian tiger in its own right. In this scenario, the economic miracle that started with postwar Japan and subsequently encompassed Singapore, Hong Kong, Taiwan, South Korea, Southeast Asia, China, and India would finally make its way to Pakistan. That most of these countries are not Muslim should be no cultural barrier; Turkey’s modernization into a middle-income country over the past decade and Indonesia’s economic transformation into a second-generation BRIC country demonstrate that populous Muslim democracies outside the Arab world are well-positioned to embrace modernity. They have done so not by relying on foreign aid, but through domestic reform and by taking advantage of globalization’s enabling environment to welcome foreign trade and investment.
Pakistan’s future as an Asian tiger has been predicted before. As early as the 1950s, it was viewed in the West, including by Dwight Eisenhower’s administration, as one of the Asian economies most likely to successfully modernize (along with Burma!). As recently as 2005, Goldman Sachs identified Pakistan’s then-high rate of economic growth amid the Musharraf reforms, its growing internal market powered by a demographic boom, its advantageous geographical position astride economic hubs in the Gulf, Central Asia, China, and India, and other factors as reasons for global investors to put their money into it as one of the "Next Eleven" (N-11) emerging economies or next-generation BRICs. Goldman’s Jim O’Neill, who coined the BRIC acronym, reiterated Pakistan’s long-term importance as a key emerging market in his 2011 book The Growth Map.
Pakistan’s natural advantages — a vibrant civil society, a moderate voting majority, an advantageous geographical position between prosperous Asian and Gulf economies, geopolitical allies in the world’s superpower and rising stars, a professional and capable armed forces, a youthful demographic, a large internal market of nearly 200 million potential consumers — suggest that a sustained dose of security and good governance could put it on track toward comfortable middle-income status. This would likely require greater economic integration with India; a diminished Army role in public life; a rate of urbanization that fueled rising demands for reform and economic opportunity; continued assistance from the West, the Gulf, and China; and, critically, the rollback of domestic political violence.
In his meeting with Sharif today, Obama can launch a "new normal" phase of U.S. relations with Pakistan — one focused not on Afghanistan or India, as in the past, but on the future of Pakistan itself — by delivering on American commitments to assist with the hard and soft infrastructure of development, from energy to education. Sharif campaigned on a modernization agenda, and America should support him. Even more important than aid would be a trade agreement to drop U.S. tariffs on Pakistani textile imports.
Pakistan need not remain a basket case forever. The economic transformation of countries with Pakistan-scale Muslim populations and their own histories as victims of terrorism, including Indonesia, India, and Turkey, show what is possible.