National Purpose

• Syndicate defined National purpose as equality,

freedom and fraternity

• Article 2A of the constitution helps in defining

national purpose

1

National Interests

• Vital National Interests

– Sovereignty

– Territorial and Geographical Integrity

– Internal Security

– Economic Wellbeing of Citizens

– Important National Interests

– Peripheral National Interests 2

National Interests

– Rule of Law– Democracy – Armed Forces to Guard our Geographical Boundaries – Adequate Nuclear Deterrence is Required – Ensure Internal Stability – Ensure Equal Opportunities to Everyone Irrespective of

Caste, Creed or Gender – Build Infrastructures and Develop Industrial and

Agricultural Base – Food, Water and Energy Security

3

Aims and Objectives

Strengthening the National Defence and

boosting National Economy to ensure equal

opportunities to all its Citizens in order to

achieve the objectives of Foreign Policy.

4

Economy of Pakistan

• Pakistan's economy has traditionally suffered from inefficiencies.

• Export promotion policies at the cost of domestic commerce, excessive fiscal leniency for services sector, low priority to industrial development and government's inability to document the national economy are some of the main failings in the country's economic regime.

5

Economy of Pakistan

The political economy of Pakistan has

remained succumbed due to over-whelming

influence of vested and cartel interests,

twisting and bending laws for gains of few

groups, not only market distortions have

emerged, but also state efforts for equitable

redistribution of income have suffered.6

Economy of Pakistan

The average growth rate since independence onwards is barely 5.2 percent. The current GDP is US$ 170 billion, per capita income is about US$ 1050, literacy rate is about 55 percent, population growth rate is about 1.6 percent and urbanization growth rate is over 3 percent. Pakistan has been suffering from double deficit. Save two or three years in its life, Pakistan has always experienced trade deficit. The current trade deficit is over US$ 20 billion.

7Source: Economic Survey of Pakistan 2008‐09, ADB Report 2008

Economy of Pakistan

• Pakistan is an agro-based country. • Over 80 percent of Pakistan's exports are still

directly or indirectly dependent upon agriculture.

• Pakistan has a narrow industrial base with mostly conventional processes and low productivity rate.

• Pakistan is under external debt of about US$ 45 billion and internal debt of about US$ 65 billion

8Source: Economic Survey of Pakistan 2008‐09, World Bank Report 2008

Economy of Pakistan

• Over 40 percent population is estimated living below poverty line but the official figure is less than 25 per cent.

• Pakistan has not been able to reap the fruits of globalization and is still standing at the crossroads of multiple challenges of WTO

9Source: Economic Survey of Pakistan 2008‐09, UNDP Report 2008 

Economy of Pakistan

• The overall foreign direct investment during the first ten months has declined by 42.7 percent and stood at US$ 2.2 billion as against US $ 3.9 billion in the comparable period of last year.

• Contrary to foreign direct investment, portfolio investment, on the other, has shown a net outflow of US$ 451.5 million as against net flow of US$ 98.9 million during the same period of last year.

10Source: Economic Survey of Pakistan 2008‐09, UNDP Report 2008 

Economy of Pakistan

• Per capita real income has risen from US$ 1042 last year to US$ 1046 in 2008-09, thereby showing marginal increase of 0.3 percent.

• Foreign remittances have also shown an increase of 20 percent compared to the corresponding period of last year.

11Source: Economic Survey of Pakistan 2008‐09

Economy of Pakistan

• Boosting and modernizing the textile sector, new textile policy tends to enhance textiles by US$ 25 billion in the next 5 years.

• As a whole, the on-going war on terror, global financial and economic recession, and structural weaknesses are badly hitting the economy of Pakistan and there is a need to address these issues.

12Source: Economic Survey of Pakistan 2008‐09

Economy of Pakistan

• If fully realized and exploited, Pakistan’s economic potentials could convert the country into prosperity.

• Pakistan faces the possibility of a prolonged slowdown in economic activity of no more than two percent a year.

• This will mean practically no increase in income per head of the population.

13

Economy of Pakistan

Owing to a number of domestic factors such as the chronic energy shortage and deteriorating law and order situation, and external factors, principally the global recession, the overall economic performance appears somewhat dismal as the economic growth slow down to 2 percent against 4.1 percent growth to last fiscal year and this year’s target of 4.5 percent.

14

Economy of Pakistan

Macro and micro-economic crises, trade shocks,

global recession, and domestic security challenges

were the main hurdles in the way to economic

growth during the current financial year.

15

Economy of Pakistan

• The major issue being faced by Pakistan is energy security.

• The project of Gas Pipeline from Iran is getting delayed and exploitation of Thar Coal is also not in view in foreseeable future.

• Pakistan has not been successful to enter into civil nuclear agreement with US on the pattern of Indo-US agreement 123.

16Source: Ministry of Water and Power, Govt. of Pakistan 2009

Economy of Pakistan

• Without adequate energy resources, the dream of industrialization and economic growth cannot be materialized.

• Pakistan must accord top priority to ensure the energy security, to trampoline the economic growth, development and prosperity.

17Source: Ministry of Water and Power, Govt. of Pakistan 2009

Economy of Pakistan

National wellbeing is direct linked with energy

security, national security and economic security.

For our economic prosperity Pakistan has to

improve incentives for investment in energy

sectors including petroleum exploration with a

target of 6.5% growth indigenous gas supply.

18

Economy of Pakistan

• Conservation energy is a huge resource of adding to energy supply.

• It aims at brining the existing energy into efficient use by eliminating wastefully internal use, minimizing loses and theft and reducing the energy intensity.

19

Economy of Pakistan

• By abroad estimate it could be added up to 40% to our energy consumption within the present energy supply capacity.

• Some developed economies are considering severe regulation to purse energy conservation: make it immoral, illegal and punitively expensive to use energy wastefully

20

Internal Security Dynamics

• Acute internal security problems– challenge to the writ of the State by the militant groups in several parts of the country

– In Baluchistan separatist elements are out to destroy government institutions ,property and  commit genocide through bomb blasts

– Pakistan cannot re‐start its journey towards development unless writ of the state is restored and national integration is ensured

21

Internal Security Dynamics– Hardliner group of Islamic extremists including foreign elements operating in Pakhtoon Khaw and FATA, destroying fabric of society

– Talibanisation is spreading at galloping pace across Pakistan 

– More than 10000 Madrassas. The number is around 40,000 if mosques with Madrassa activities are included 

– Over 2 million students inclined to adopt the course of Jihad

22

Internal Security Dynamics

– Hostile international forces are adamant on treating Pakistan as an epicenter of terrorism in the world 

– Pakistan must make efforts to regulate and mainstream Madrassa 

– There is a need for establishment of effective Madrassa Regulatory Authority at the Divisional level headed by Commissioner 

23

Internal Security Dynamics

• The main tasks of the authority would be to carryout comprehensive survey of the Madrassa and mosques for the purpose of mandatory registration to mainstream the Madrassa 

• The Madrassa should be funded out of the education budget in proportion to the number of students enrolled, provided they meet the minimum prescribed standard

24

Internal Security Dynamics

• Strict legal action shall be taken against Madrassa involved in anti state activity. Illegal use of loudspeaker and FM Radios shall not be allowed at any cost 

• Ulema of all sects be engaged through forums like Mutahida Ulema Board for restoring peace

25

Internal Security Dynamics• internal security crisis in urban areas, especially big cities• the crime rate has generally increased• attributable to the degradation of cultural values, absence of 

income generation opportunities and weaknesses of the law enforcing agencies.

• Pakistani society, especially urbanities is alleged to have weaponized over the passage of time. Holding and carrying of illegal arms is not an uncommon phenomenon.

• The rate of crime like murder, robbery, target killing is also not declining despite aggressive police reforms and reinforcement and skill development of law enforcing agencies. 

• Sixty years of Pakistan’s history compels us to learn lessons from the past. Law and order itself is not the primary issue as it always arises due to certain public policy failure on which there is, in general, lack of faith and consensus.

26

Internal Security Dynamics

• Chalk out a clear roadmap for integration of FATA into national main stream 

• Change in laws and judicial reforms to deal with Militancy/ Terrorism

• Ensure national orientation towards non ‐ state militant actors • Consistent political and economic follow up of military operations• Militarily Pakistan should be in effective control of FATA with 

enhanced influence, particularly in South Waziristan Agency / North Waziristan Agency

• Calibration of  policy and strategy with the changing regional environment, particularly with reference to Afghanistan

• We should be in a state of balance politically, economically, socially and militarily at the time when US executes its exit strategy

27

NATIONAL SECURITY CONCERNS

• Sovereignty under threat – drone attacks

• Military & Intelligence Agencies accused of links 

with Taliban / al‐Qaeda

• Nuclear Assets under threat

• Taliban & foreign Jihadis presence

• Disputes with India ‐ Kashmir, water issues

28

• Madaris & Jihad ‐ foreign funding

• Afghan refugees

• Economy – Poverty, unemployment, etc

• Militancy, terrorism 

• Violence & law and order

• Growing US – India relations 

Contd…

29

PAKISTAN’S CONSTRAINTS

• USA & NATO in neighborhood, War on Terror

• Dwarfed by China & India – military & economic giants, competing regional interests

• Economic constraints

• Weak institutions – political focus

• Waning writ of state

30

SCENARIO

PAKISTAN• In its 62nd Year of life • Plagued with

IntoleranceMilitancySectarianismTerrorism CorruptionEthnic Strife

31 31

CONSEQUENCES

THREATS

32 32

REGIONAL DYNAMICS INDIA

• Strained relations; blame game

• Volatile Eastern border

• Two major wars – 1965, 1971

• Pakistan dismembered

• Tense past from 1947 to Kargil to Mumbai 2008

33

REGIONAL DYNAMICSINDIA

• Nuclear explosions – 1998

• Kashmir, Siachen, Sir Creek, Water issue

• Cross border terrorism

• Largest democracy, Second most populous

• Bilateral trade & SAFTA

• Cultural invasion34

REGIONAL DYNAMICS

AFGHANISTAN• History, Culture & Geography • Russian Invasion / Afghan Refugees• Taliban, 9 /11, al-Qaeda• US, NATO, ISAF • Landlocked country – transit & bilateral trade• Relations with Karzai regime• Indian Involvement• Drug / Weapons / Gun Running / Smuggling

35

REGIONAL DYNAMICSISLAMIC REPUBLIC OF IRAN• Good relations during Shah’s era• RCD• Islamic Revolution• Increasing Socio-economic influence in region• ECO – ECOTA• Sectarianism

• Gas pipeline to Pakistan – American reservations

• Nuclear dream – Uranium enrichment facility36

REGIONAL DYNAMICS

CHINA

• Historic links – trade route, new rail-road link

• Diplomatic support to Pakistan

• Defence Cooperation

• Economic cooperation

• Investment – Gwadar, Ormara ports, Saindak Project

37

GLOBAL DYNAMICS

UNITED STATES OF AMERICA

• Roller coaster relationship

Three engagements

Sanctions

• Post 9/11 scenario

• War on terror/Impact on Pakistan

38

GLOBAL DYNAMICS

UNITED STATES OF AMERICA

• Economic Relations

Largest importer of Pakistani goods

Largest investor

Economic Assistance to Pakistan

39

UNITED STATES OF AMERICAFATA Development PlanROZs

New Non ‐Military aid  of US$1.5 Billion over 10 years

• Strategic Dialogue• Defense Cooperation• USA’s concerns

Pakistan’s nuclear assets

Alleged links of Pakistan's intelligence agencies with militants

40

GLOBAL DYNAMICS

UNITED STATES OF AMERICA• Pak‐Iran relations

• Pakistan’s concernsSovereignty issue (attacks in Pakistan’s territory)

Post exit scenario

Increasing terrorism in Pakistan

India‐USA relations

41

Foreign Policy

• Article 40 of the Constitution of Pakistan

• Quaid’s View

42

Pakistan’s Internal Dynamics

• Precarious internal situation

• Unstable economy

43

Strategic Analysis

44

Policy Formulation Assumptions

• Domestic– Weak political govt.– Role of non stake actors – Fragile economy – Electronic Media – Lack of institutional support – Role of Army

• Regional – Relation with India – Unstable Afghanistan – Iran ambition

45

• Global – Unipolar – Economic factors determining foreign

Policy – Image of the country – Role international financial institution – Nuclear proliferation

46