A new world-order in the making
By Mehmood-Ul-Hassan Khan
The world has changed after the tragic event of September 11. Search for new friends, creation of new alliances and exploration of new markets and economies - all these activities are going on and on around the globe. Every country has changed its geo-political priorities, genuine philosophical stances, and geo-strategic approaches to cope with the internal socio-economic problems and external compulsions. Pakistan is also facing all kinds of socio-economic problems and trying its level best to put the already shattered economy on the right path. But, all the national managers of economy and master minds of planning and financial experts will have to pull out the economy from troubled waters with the latest available national resources, and the emerging bitter realties around the globe. It is correct that the ratios of global foreign direct investment and foreign portfolio investment have decreased in the year 2001-2002, due to many reasons. The flow of foreign direct investment (FDI) into 86 major economies fell to 52.7 per cent to $694.8 billion in 2001. It was the biggest fall since 1970; global trade also fell in 2001 for the first time since 1998, chilled by a slump in the information technology sector and the fallout from the September 11 attacks.

THe IMF has cut its growth forecasts for most major economies of the world including the USA, Germany, the European Union, Japan, Asia and the Middle East countries. Economic imbalances are also a risk to the global recovery, such as the high current account deficit in the United States, recession in Germany, increasing ratios of bad debts in Japan, constant Middle-East tension and its impact on oil prices and the risk of attacks similar to those on the United States on September 11, and the last but not the least, perpetual enmity between Pakistan and India are decreasing the brighter chances of regional and global economies. Furthermore, Pakistan is also in great trouble because Nigeria has suspended imports from Pakistan for more than 5 months, and Canada has not granted the special country status to Pakistan exports (textile goods), which is decreasing the ratios of profitability. Dominance of the Chinese textile goods in the international markets are also supposed to be the main hurdle for the promotion of the textile industry of Pakistan in the international markets.

Recently, President Perveiz Musharraf has stressed the importance of peace and security in South Asia, which are vital to economic development and prosperity in the region, and it will also contribute significantly to the promotion of international peace and stability, given South Asia's strategic locations astride regions with vast natural resources and economic potential. Globalisation, emerging financial markets and economies, inequality, growth patterns and scarcity of resources have forced every country to go for new potential markets/economies, where it can generate more foreign exchange and revenues. The increasing globalisation has made markets/economies more interdependent and interrelated than ever before. The increased international integration of economic activity, the emergence of international capital markets as a consequence of trade and international financial deregulation, as well as the growth of powerful information technologies has created a new set of influences on the world's economic geography. Flows of investment to the developing countries to take account, both of low labour costs for industry and emerging markets have stimulated economic growth, increased employment and create a major new era of prosperity. Sony, Japan shifted its TV factory from Japan to Malaysia because of easy availability of cheap labour. Pakistan has offered to Azerbaijan to utilise Karachi as a trading post for the promotion of trade with the Far East and other countries. Turkey has also offered Pakistan to use Istanbul as a warehouse for its exports to the rest of Europe.

Due to increasing globalisation of financial markets and economies, expected compulsions of GATT/ WTO and scarcity of resources, there is a great need for us to make every possible effort to search for new potential markets and economies in the region and around the globe for bilateral trade, joint ventures and investments. Knowledge of international marketing, applied economics, international banking, diplomacy/foreign policy, and above all political will is vital for the search of new markets and economies for having bilateral trades ties.

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