Reviewing Pakistan’s GSP+ status

Continuation of policies and a bipartisan approach to development problems is key to successful economic turnaround

Recently, the European Parliament adopted a resolution calling for a review of the Generalised System of Preferences-Plus - popularly known as GSP+ - status granted to Pakistan after an alarming increase in blasphemy accusations as well as a growing number of incidents of attacks on journalists and civil society organisations. The resolution also called for the government of Pakistan to condemn incitement to violence against religious minorities and expressed deep concern at the prevailing anti-French sentiment in Pakistan.

The resolution says that Pakistan has considerably benefited from the GSP+ programme. However, the GSP+ status comes with the obligation “to ratify and implement 27 international conventions, including commitments to guarantee human rights and religious freedoms. “The resolution also said that “the repeated and deceptive attacks against the French authorities by radical Pakistani groups and recent statements by the government of Pakistan on the grounds of blasphemy have escalated since the response of the French authorities to the terrorist attacks against the French school teacher for defending the freedom of expression.”

Pakistan is among ten or so countries currently benefiting from the GSP+ status. It was given the status in January 2014. Subsequently, there were three biennial assessments. In March 2020, the European Union Parliament extended the GSP+ status after the third biennial assessment. As a result of the duty-free access available to Pakistan in 27 European Union member states, Pakistan’s exports to the EU increased from 4.5 billion euros in 2013 to 7.5 billion euros in 2019, registering a growth of 65 percent. The tariff was waived on around 66 percent of the product categories of exports to the EU. Tariff concessions were to the tune of 5.9 billion euros in 2018. Textile and garments sectors have been the major beneficiaries of the GSP Plus status.

The third biennial assessment report gave a positive review of Pakistan’s steps in climate change, combating illicit narcotics and wildlife trade, social protection initiatives like Ehsaas and interfaith harmony, including the opening of the Kartarpur corridor. However, the report raised serious concerns on the issues of freedom of expression and shrinking space for the freedom of civil society to operate.

A popular response to the EUP resolution is that it all happened because of TLP’s violent protests. While a particular event may have provided the urgent trigger, the roots of the problem lie deeper and predate the TLP’s violent protests. GSP+ status is symptomatic of Pakistan’s deep-seated structural economic problems and questionable human rights record and curbs on the freedom of expression.

While it is easy to identify the factors responsible for exploitation of religion for political and personal ends, those at the receiving end of a possible adverse review would be least responsible for the current state of affairs. In the worst-case scenario of the EU revoking the GSP+ status, industrial workers are most likely to be at the receiving end. However, in the epic game of narrow parochial interests fought behind lofty narratives, the loss of livelihood for a few hundred thousand workers might be ignored.

A popular response to the EU resolution is that it happened on account of TLP’s violent protests. While a particular event may have provided the urgent trigger, the roots of the problem lie deeper.

The holier-than-thou firebrands are manufactured with a purpose. Their real skill is exploiting religious passions. Given the state of religious passion in Pakistan one can ignore the role of such rabble-rousers at one’s own peril. Apart from the munitions of lopsided accountability, political engineering and legal trickery, the holy “assets” are routinely launched to put the enemy ranks in disarray. Today’s enemies are yesterday’s comrades. Will today’s friends learn any lessons?

We are a queer people, indeed. We should not have waited for the EU to tell us that we have a terrible human rights record and that freedom of speech has suffred unprecedented setbacks. Our propensity to procrastinate and wait for revolutions is unbeatable. Few things might have done Pakistan greater damage than the populist slogans of turning around its fortunes overnight. It is a contradiction in terms to claim that the mess accumulated over 73 years can be cleaned overnight. Pakistan needs an urgent paradigm shift. While “revolution” is the buzzword in most developing countries, most developed nations have learned the superiority of evolution over revolution. The sooner we understand that the solution to our problems lies in following a painstaking evolutionary route, the less delusional we will become.

Pakistan’s journey must start with a patient and careful rebuilding of the institutions. We should understand that institution building is a long, protracted and painful process. One of the most important reasons why we need to abandon the idiom of revolution is that the idea has been routinely invoked in the past to emaciate and, at times, dispense with the constitution. All the military dictators in the past were enthused with this misdirected spirit to keep the constitution in abeyance to turn Pakistan into a better place. One unmistakable lesson from history is the realisation that all efforts at turning Pakistan around overnight have left the country worse off. Pakistan has paid a heavy price because of the do-gooders who circumvent the rules to bring about overnight changes.

If we needed a truth and reconciliation commission at any time in the history of Pakistan, that time may be now. We need a firm commitment to the constitution in its true letter and spirit. Abrogating the constitution is a serious crime because it is committed in order to serve the vilest purposes and has more far-reaching consequences than most crimes. A commitment to the constitution means that all the institutions in the country should work in their well-defined domains and not interfere in the working of other institutions.

That organic and inclusive development is not possible without a firm commitment to the constitution can be explained by a simple example. Pakistan’s industrial base is narrow and exploitative. It still needs the GPS+ crutches on its 75th birthday. What can possibly explain why a nuclear Pakistan has performed so poorly? The answer is that a range of factors, reinforcing and neutralising each other, contribute to our dismal economic performance. Inequality is one ofthe major reasons why Pakistan has failed to register healthy economic growth. Only a small number of individuals in Pakistan have access to most of the resources, whereas most people are excluded from the dividends of economic growth.

The sinister role of real estate development in the national economy has sharply accentuated this exclusiveness. Many economic models suggest that industrial growth requires savings. Once a critical savings and investment level is achieved, the country is on an economic growth trajectory. This is the route followed by many developed countries in the past and, more recently, by China. The problem with Pakistan is that most people have just enough to keep their bodies and souls together. They can hardly save anything. Consequently, the industrial base is narrow and there is little revenue that the government can invest in human development. There is a vicious circle of poverty and the government’s inability to invest in the people.

How can we break this vicious nexus of a narrow revenue base and governments’ refusal to own the responsibility to take care of the education and health of the people? The narrative around investment in education is largely misleading. Investment in education, per se, is no good unless people are equipped with the necessary skills to keep pace with the emerging knowledge-based economic order. In Pakistan, education adds little value to the moral base of the society. It is largely unproductive as shown by the obsolete productive infrastructure of the economy.

How can a broad-based industrial infrastructure be put in place? A broadening of the industrial base cannot happen in a vacuum. It requires a priority reset. The well-being of the poor must take precedence over other concerns. The strategic and socio-economic policies pursued over the last many decades have landed us in far deeper trouble than we can manage.

Consistency of policies and a bipartisan approach to development problems is a key to successful economic turnaround. However, the continuation of the socio-economic policies is possible only when the political institutions are mature enough to transcend narrow interests. Decades of political engineering have muddied the political waters to an extent that the first objective of any government is to persecute its political adversaries, silence critics, and gag the difference of opinion. Only a firm commitment to the constitution can guarantee that the political institutions evolve and mature and pay economic and social dividends. To that end, political engineering must come to an end.


The writer is an  assistant professor in the Department of Economics at COMSATS University Islamabad, Lahore   Campus

Reviewing Pakistan’s GSP+ status