WHAT purpose, if at all, the recent Democracy Summit hosted by US President Joe Biden served is not clear, but the business community seems to be worried by the government’s decision to stay away from it. Turning down the US invite, they think, was not a smart move for a country already seeking favours from Western institutions. The decision may entail economic consequences, they fear.

Those with particular concerns are the exporters and ones seeking partnerships with Western companies. “As if adjusting to rising input cost, utility rate hike, gas shortages, expensive bank loans, reversal of subsidies, exemptions and amnesty schemes was easy. A more hostile world will be too much to deal with,” said a businessman on return from an investors’ conference in Dubai last week.

He was disturbed because a potential investor he was courting for a business partnership told him over the dinner table: “Individually, you are great to associate with, but Pakistan is the last place I would consider investing in irrespective of returns. Nothing is worth risking life for me.”

A trade expert sharing views anonymously said: “On the heels of the ghastly Sialkot incident, the government’s stance on Biden’s Summit could be misconstrued and used by the hostile lobbies to hurt Pakistan’s interests. Unless China had given an ultimatum to pick a side, there was no justification for missing an opportunity to represent Pakistan at a global forum”.

The govt may well have its reasons to stay away from the US-led Democracy Summit, but the decision has sent jitters down the spine of the business community

Commenting on the issue adviser on finance and revenue Shaukat Tarin owned up the government’s position. He wrote in a brief response to Dawn: “We cannot compromise on our principles no matter what the consequences”.

M. Abdul Aleem, General Secretary of the Overseas Chamber of Commerce and Industry, was not convinced. “From a trade and investment perspective, Pakistan should have participated in the virtual summit, maybe through a member of the PTI team, if the prime minister was reluctant. Granted the US has underplayed Pakistan’s contribution towards regional peace, but we must keep in perspective US’s influence in the international finance institutions and the Financial Action Task Force. Moreover, the US is our largest trading partner. Considering the negative fallout of the Sialkot incident, we should have been rational and not emotional”.

Reluctant to own his comments, a former president of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) said diplomacy was all about engaging; to hear and to be heard. “The government could have conveyed its reservations over excluding China, Russia, Sri Lanka etc, while at the same time adding a voice to the global call to resist and reject the resurgence of intolerant authoritarian streaks around the world,” he commented.

FPCCI President Mian Nasser Hayat Maggo sounded anxious. “No, I am not satisfied with Pakistan’s economic diplomacy. I don’t believe we can grow and prosper in isolation. The government should not have missed a global platform to address world’s concerns,” he said over the phone.

On its part, the government seems content with the quality of economic diplomacy. It has claimed a close cordial relationship with all nations. According to a source in the relevant ministry, Pakistan has bilateral investment agreements with Australia, Azerbaijan, Mauritius, Bahrain, Bangladesh, Morocco, Belarus, Netherlands, Belgo-Luxemburg Economic Union, Oman, the Philippines, Bosnia, Portugal, Bulgaria, Qatar, Cambodia, Romania, China, Singapore, the Czech Republic, South Korea, Denmark, Spain, Egypt, Sri Lanka, France, Sweden, Germany, Switzerland, Indonesia, Syria, Iran, Tajikistan, Italy, Tunisia, Japan, Turkey, Kazakhstan, Turkmenistan, Kuwait, the UAE, the Kyrgyz Republic, the United Kingdom, Lebanon, Uzbekistan, Laos and Yemen. The country has free trade agreements with Sri Lanka, China, and Malaysia. Pakistan is a member of the South Asian Association for Regional Cooperation and signed preferential trade agreements with Iran, Indonesia, and Mauritius.

Pakistan has still not been able to boost exports or attract foreign direct investment anywhere close to its potential. Bangladesh annual exports are racing to cross $40 billion while Pakistan’s has been vacillating in a narrow band of $25-28bn for the past many years. According to United Nations Conference on Trade and Development, the foreign direct investment (FDI) flows to India have grown by a whopping 45 per cent from $44.5bn in 2016 to $64bn in 2020. Pakistan on the other hand found FDI to contract by almost a fifth from $2.5bn to $2.1bn in the same period.

Khalid Mansoor, Special Assistant to the Prime Minister on China-Pakistan Economic Corridor (CPEC), was reached for his input on the issue. In a written response, he said: “Since I do not have the full background of the decision taken by the government with regards to the Democracy Summit, I can’t comment. As far as China relations are concerned, the CPEC Authority has been receiving full cooperation and support from the Chinese side regardless of any developments on the international front.”

A private trend-watcher tried to paint the larger picture thus: “The government can scream itself hoarse boasting friendly ties with China, but the fact that Beijing is dragging its feet over CPEC is obvious. Saudi Arabia that bailed Pakistan out in the past has also changed colours. It did agree to lend $4.2bn, including a $3bn cash deposit at 4pc interest for a year that can be withdrawn on a three-day notice and $1.2bn for deferred oil payment facility at 3.8pc interest that has to be returned in full next year. The International Monetary Fund has yet to resume funding under its programme though the government has complied with many of its conditions. Sorry, but how delusional can one be?”

“The elite in Pakistan may not champion democracy, but resent souring relations with the West. The government must do all in its power to re-energise CPEC, but must keep the orientation of society and economy in mind when dealing with global partners,” advised a former diplomat.

The ministries of foreign affairs and commerce were approached, but their response did not reach Dawn till the filing of this report.

Published in Dawn, The Business and Finance Weekly, December 13th, 2021