The world at present is an anarchic condition, primarily driven by President Trump’s deliberate policies of shaking up well-established global and national institutions. One can only presume that the rationale could be to reconstruct these institutions so that they are more amenable to serving US interests. But it is a very risky path that he has chosen to “Make America Great Again”.
America’s phenomenal economic rise and prosperity of its people, spread over the last several decades, was primarily facilitated by its strong democratic values, a peaceful political order and an open economy. President Trump’s present policies in certain areas are a deliberate reverse of that in many aspects but he ardently believes that he will succeed. However, the rest of the world including its Western allies think differently and it is not surprising that no country has openly praised his policies.
Trump’s policies mirror his concept of grandeur for America and for himself. In the pursuit of this aim he is shaking up the very foundation of the world order on which America, Western Europe, Japan, South Korea and several democratic countries including India, Pakistan and Bangladesh, benefited. By accusing his trading partners – many of them his allies – of unfair trade practices undermining the United States all along he is shaking their confidence and hurting mutual trust.
The US was able to maintain a strong economic relationship with China, despite ideological and political differences. So far China’s response has been muted and it is assessing the consequences. It is possible that the chaotic world order would facilitate China to enhance its global power and prestige. As regards Russia, President Putin seems to enjoy good relations with President Trump.
However, the investment climate in the US has suffered a setback and private equity firms are retrenching. In fact, the credibility of the US is at stake. It is possible that the commitment by the UAE that it will bring in billion and trillion worth of investments could fall through. Due to uncertainty about tariffs being imposed by the US, global markets tumbled causing huge loses.
The policies pertaining to climate change in which the US was playing a major role are now likely to go in the background.
Already economists are predicting global recession that has serious consequences especially for countries with feeble economies. It was not surprising that Pakistan’s stock exchange tumbled to historic lows. Strong global economies — China, Japan, Singapore and others – dependent on trading with the US suffered huge losses.
The problem is that one presumes and rightly so that democracy as a form of government promotes social cohesion as well as a political class, and particularly a leadership, that firmly adheres to policies that promote national interest and economic development. President Trump’s policies and his discourse do not reflect that. On the contrary his policies and decisions have created a sense of uncertainty and chaos in every major field — be it the economy, politics or international relations. The future, especially for developing countries, seems to be uncertain and chaotic.
There is also a lingering feeling that the US that stood for championing the cause of democracy and freedom of practising religion may be drifting away from it. The most disturbing aspect is the unpredictability of the global order. Even the US allies, the European nations and Latin America are wary of what policies and direction America takes. The very concept of a shared interest in building and strengthening democratic institutions by promoting universal education, social cohesion, better governance and promoting and ensuring women’s rights is uncertain.
It is now mostly dependent on the whims and preferences of the President and his team. Undeniably, these and his other policies have consequences for countries including Pakistan. For example, Pakistani students had looked up to US scholarships for studying in premier American educational institutions; or doctors working in US hospitals to gain experience and also contribute to its health sector.
One aspect that President Trump and his team seem to overlook or sidetrack is the extent of goodwill and bonds that these policies created between the people and professionals of the two countries, placing the relationship on a firmer basis and with a human touch. The very concept of shared interest is at stake. It is also not certain if these policies will strengthen the US and world economy. More likely it would for a few years slow down global growth and possibly provide additional openings to China, European Union and Russia.
Hopefully, in the long term this may be good for the global economy and developing countries as they would have more options for imports and exports and also to promote indigenous production. This option however would only be available if the country has the competence and the industrial capacity to manufacture these goods.
Another critical aspect that Pakistan’s leadership should be conscious about is that the country’s vital interests lie in having alternate options in promoting trade and sources for obtaining and developing indigenous products and technology. Equally critical is that their own beliefs and policies should converge. One is not certain if this is always the case. There is also not sufficient realisation that despite seventy-seven years of existence the country’s technological and industrial base is weak and heavily dependent on external sources.
With heavy tariffs being imposed on goods being imported from China, the future of global trade is uncertain. What cannot be overlooked is that President Trump’s policies are not only going to adversely impact China but a host of countries that import components or systems from China and assemble them locally and export to America. If such a large number of countries along with China are being adversely affected by the US policies, the consequences will appear in the form of a global economic slowdown and a highly uncertain future.
How is Pakistan government and the industrial and business sector preparing itself to deal with this extra ordinary challenge? If the crisis is not handled properly, our economy as well as the people will bear the brunt.
#Implications #global #disorder
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