In order to bring about economic turnaround on a fast, steady track, Pakistan should set up financial hubs and also focus on semi-conductors’ manufacturing, optimum utilization of its $ 1 trillion mineral reserves and emulation of China's model of 10 -year-economic plan with emphasis on switching over to ‘Made in Pakistan’ strategy, drastically cutting the import bill by producing synthetic fuel and energy from its indigenous coal reserves.
Nations do face challenges off and on. However, in the case of Pakistan, things can take a better shape as ours is a land that is equipped with diversified resources which can alter our course towards massive growth, if harnessed and utilized optimally. Take, for example, our huge reserves of rare earth minerals which can lead to the production of semiconductors and chips.
Equally encouraging are our coal reserves which amount to around 175 billion tons. Its sagacious use can save 29 to 30 billion dollars a year through a vigorous oil import substitution formula. Switching to synthetic fuel, made from coal liquefaction, instead of oil, is the best, practicable option as our coal’s Gas Calorific Value is quite good i.e 4 K to 6 K. As regards the trumpeted apprehension of coal-related pollution, filter bags and Waste Heat Recovery (WHR) can recapture the pollutants which re-produce electricity. This process is already in practice in our cement industry. In the energy sector, grid synchronization is required without delay.
On the finances’ front, while the present Current Account surplus should be raised to $ 10 bn per annum, a financial hub in Pakistan, like that of Dubai and Singapore be established to bring big international banks and FIs in the country along with back offices of big companies dealing in hedge funds etc.
A Special Financial Hub to attract hot money is yet another need of the hour. The government must allow training in and mining of cryptocurrency whose underhand trading volume in Pakistan is $ 25 billion per annum as there is tremendous potential of earning billions of dollars through export in this field. It must be borne in mind that the global market cap of Bitcoin alone stands close to $ 1 trillion. What is needed more, is a separate regulatory and licensing authority for crypto mining, along with the issuance of brokers’ licenses for this trade.
More importantly, there is a dire need for having a Technology Institute of Pakistan like India’s IIT whose acceptance rate is less than 1.5 %, far better than the US’ MIT, which is 2 to 3 %.
As for the formulation of our economic policies, there ought to be no-reversal, foreign investor-centric policies in place. Likewise, all the stakeholders must unanimously work out a broader economic charter that should stay, in addition to building up a democratic face leading to FDI’s inflow, in turn.
In this context, SIFC can be described as a step in the right direction as it aims at enhancing our potential in vital areas including Pakistan’s IT and allied services whose existing export quantum is not up to the mark as it is just $ 2.8 billion.
Ali Alam Qamar (The writer is a certificate-holder in Sustainable Finance & Investments from Harvard Business School and MSc, Finance from Cambridge)
