The new government of Pakistan faces a serious challenge regarding the economic condition of the country.
Finance Minister Ishaq Dar is making unsuccessful attempts to overcome this. He is keeping his eyes fixed on India with great expectations.
He recently said that his government will look seriously at trade matters with India. Before understanding his statement in detail, it is more important to know that restarting business has become a big challenge for Pakistan today.
At the same time, India has progressed a lot towards doing equal trade with the powerful countries of the world.
Pakistan’s situation today has become even more dire because in 2019, Prime Minister Narendra Modi’s government broke economic ties with India after the abrogation of Article 370 from Kashmir.
The current situation is also not good because most of the leaders of Pakistan still believe that they will not restore economic relations with India until the old status of Kashmir is restored. However, Pakistan is facing a one-sided loss due to this.
Now let us talk about Dar’s latest statement. His party Pakistan Muslim League-N has the support of the lower capitalist classes living in semi-urban areas.
Former Prime Minister of Pakistan Nawaz Sharif has good relations with the big industrialists of the country. Therefore, the present government wants to move towards restarting business in Pakistan keeping in mind the interests of its party and the former chief.
The World Bank estimated in 2018 that Pakistan’s exports could increase by 80% if trade with India reaches its potential. At that time that amount was equal to about 25 billion dollars.
It will not be easy for Pakistan to give up billions of dollars in today’s situation. Its economy has derailed. Recently, the last tranche of $3 billion has been received as assistance from the International Monetary Fund.
However, the need is much greater than this. Prime Minister Shehbaz Sharif has indicated that more funds will be needed soon. He said it would be impossible to restore macroeconomic stability without additional cash.
How much does India need Pakistan?
Everyone knows that Pakistan needs India, but this debate does not seem to end. Here it is important to know how much India needs Pakistan.
Today, India’s economy is stable. India does not seem to be that interested in opening its markets to other developing countries.
There is no harm for India in ignoring Pakistan. Today, India’s economy is 10 times bigger than Pakistan’s. In the 1970s, Pakistan’s per capita income was almost double that of India.
However today India’s is more than 50%. At the same time, friendship with Pakistan can prove to be a politically losing deal for the current Narendra Modi government. Because in 2019, after sending fighter aircraft across the Line of Control in Kashmir, PM Modi was again successful in forming the government with a higher majority.
In such a situation, now the entire responsibility falls on Pakistan to convince India for trade. Pakistani diplomats should definitely wait till the Lok Sabha elections are over for this. If Modi is re-elected, it could be an opportune moment to start talks.
This is because after taking over the inheritance for the third time, he may be a little lenient towards his neighbours.
Pakistan should not be too passive. PM Modi gets along very well with Nawaz Sharif.
In 2015, he went to Nawaz Sharif’s house in Pakistan after receiving an invitation for his granddaughter’s wedding. In such a situation, the relationship between the two countries can bring the relations between the two countries back on track.