PAKISTANIS are somewhat reluctant to accept, but it has been by no means ‘business as usual’ since the day President Donald Trump took charge of the White House.
The choice of the team and the decisions announced by the US president clearly signal a policy turnaround. The flurry of orders over the past one month has challenged the global economic order and reopened debates on issues that the world thought had been sorted out and settled once and for all at the intellectual level.
These include women rights, religious freedom, refugee settlement, sensitivity to environment concerns, treatment of socially disadvantaged citizens, value of delegation of power, sharing and caring among nations for the larger good, and the supremacy of the rule of law. Today, none of it stands the way they stood a few weeks ago.
In this special report, Dawn team reaches out to stakeholders for their views on what lies ahead and opinions on a strategy to deal with the unfolding challenges
Discussing the blowback of fanning Islamophobia and how it could instill a new life in what appears to be waning militancy in Pakistan and elsewhere is beyond the scope of this report despite the economic cost that the worsening security situation entails.
Commenting on strictly the economic dimension, experts contacted said the negative by far outweigh positive fallouts of changes initiated in the US. “It will take time to understand all dimensions of a new Trumpili (a word coined for Trumpian) world”, said a commentator.
The upbeat factors include rise in flow of remittances by non-resident Pakistanis; slow-down in brain drain; less interference by the US in local affairs and the consequent inward shift of focus.
The list of fears is just as impressive. Only more: uncertainty could depress private investment, bilateral trade engagement may weaken with exports taking a hit; dollar volatility may disturb the local currency market; sudden rise in remittances may create bubbles in quick-return avenues of investment like property, stock and commodity markets; US capital flows to development sector may shrink; and public hostility towards US could exert pressure on American companies in Pakistan.
“It took centuries of sufferings and decades of struggle to arrive at a stage in history where racism, bigotry, misogyny came to be equated with ignorance and backwardness. Despite divergence on multiple issues, the humanity covered great distance in the past three decades to evolve a consensus on issue that hurt and help progress of citizens across the world,” commented a watcher defending protests against Trump in and outside the US.
“The progress on MDGs that lifted millions out of poverty through interventions under global watch was unimaginable 50 years back. The launch of SDGs in 2015 further solidified the spirit of collective action for making the world safe, free and fair,” he added.
The global balance seems to be in tatters. Brexit followed by Trump’s victory in the US shattered the confidence in collective wisdom, media and the future. The rapid-fire pattern of executive orders being churned out by the Oval Office spells protectionism, isolationism, unilateralism and parochialism. The groundswell of reaction in the US and elsewhere has underlined the almost universal discontent with the policy direction. Though CPEC has guaranteed Chinese patronage, Pakistan — even without a country-specific order yet — is bound to feel the pressure with the attitudinal drift in the US which is one of the biggest trading partners, home of the most influential currency, key patron of the development sector, and a major source of remittances. It is, therefore, apt, at the completion of a very long first month of American presidency, to reassess
“Now if the leader of the most advanced nation starts acting erratic and openly expresses views and takes actions inspired by dangerously conservative narrow outlook, people and businesses have every reason to be alarmed and resist as much as they can,” he concluded.
Corporate America which was projecting Trump as a free market champion at the World Economic Forum earlier got the first reality check when the president announced what was termed ‘Muslim ban’.
The business heads of renowned US companies, including Amazon, Google and GE, who have talented employees from all around the world, including Muslim countries, opposed and claimed that their staff was “critical to their success” and pledged to make their voice heard by the new administration.
“A hostile Muslim reaction will directly hurt our business as we have profitable subsidiaries in many Muslim majority nations,” said a joint communiqué that was quoted by the media.
Back home, top business circles were deeply anxious about making sense of the possible impact on capital flows, currency and market accessibility, and how to adjust to those changes. They regretted the lack of guidance from the government.
On its part, the government, fearing sanctions, did take certain security-related measures (banning and arresting leaders of banned outfits). It announced broadening the base of the combing operation to weed out rough elements.
Drawing comfort from the progress on CPEC front, the official position understated the possible fallouts of protectionist bend in US policy set. The economic diplomats in PM Sharif team claimed to have prepared a brief, suggesting measures to avoid disruption in bilateral trade with the US.
The bankers insisted that mild unrest in Pakistan’s currency market is rooted in other factors that had little or no connection to Trump or his policies. They dismissed the possibility of higher flow of remittances from the US which is unlike the post-9/11 phase.
“See data. It speaks louder than words. The data shows that remittances are actually falling,” a banker said. He seemingly forgot that SBP has yet to report the inflows after Trump took over late in January.
Real estate consultants took great pains for obvious reasons to prove that the talk of another property bubble in the making was not true. “Well, at least my sister settled in US is here despite re-entry risks. She bought an apartment in haste as she wanted some place to return just in case the situation turns for the worse,” a friend discussing the subject commented.
A property dealer concurred. “I have not a shred of doubt in my mind that the next cycle of price spiral is just about starting, though it is hard for me to explain it”.
Published in Dawn, February 19th, 2017