Age of Geo-Economics By M Ziauddin

The globalization process has turned the world into an increasingly interdependent entity. No nation state or a country can now claim to be absolutely sovereign, in both socio-economic or/and military sense. However, without an irreducible minimum sovereignty over its economy and culture as well as its military prowess no country can escape being turned into a subservient state fated to trade its independence for survival.
Such nations find themselves constantly threatened by the fate that the nuclear armed Soviet Union had to face in the cold war.

As globalization is firstly an economic process, it is understandable that security has shifted from the military to the economics. Economic security takes into account, particularly, the new risks occurring from the combination of the globalized competition and the incredible new role of information and telecom, for example threats on data, attacks on public research centers, attacks from financial predators against state currencies, stock market manipulations, short selling exports to damage competitors in the world market etc.

When Indian Prime Minister Narendra Modi threatens to punish Pakistan with international isolation, he is not talking about political isolation of a nuclear Pakistan. This he cannot achieve even if he were to succeed in mobilizing majority of world opinion against this country.

What, however, we should guard against is being rendered isolated in the geo-economic terms. Already unconfirmed reports are circulating in the region that by heavily subsidizing its textile, leather and surgical exports India is inching towards capturing Pakistan’s markets for these goods which make up nearly 90 per cent of our export earnings. This is something to be looked into urgently and steps taken to neutralize the Indian economic offensive.

Already India has entered into increased manpower export agreements with to GCC countries and Saudi Arabia that are likely to eat into our own share of this market. Kuwait is already out of bounds for our manpower export.

More seriously, the US seems to be working in tandem with India in the latter’s effort to push Pakistan into economic isolation. Though these voices are still very feeble what we should be mindful of is that this is the second time that the US is thinking of creating economic problems for Pakistan. It was at the fag- end of the late senior Bush’s presidency—1990— that sanctions were imposed on Pakistan invoking the Pressler amendment for what Washington said crossing the nuclear ‘Red Line’.

If it is our economic isolation that is being contemplated by India, it is time we do something concrete for our economic security. In the context of politics and international relations economic security is the ability of a nation state to follow the policies of its choice to develop the national economy in the manner desired. In today’s complex system of international trade, characterized by multi-national agreements, mutual inter-dependence and availability of natural resources etc., economic security today forms, arguably, as important a part of national security as military policy, perhaps even more.

Globalization has produced a redefinition of economic security in light of the risks posed by cross-border networks of non-state actors and by the economic volatility of the new global environment. The relationship between economic globalization and undesirable economic and political outcomes must be specified precisely and assessed carefully, however. Judgments about economic security must weigh the effects of increased volatility introduced by globalization against the benefits of improved economic performance in the longer run. National institutions will remain central to the provision of economic security under conditions of globalization.

A new index called Comprehensive National Power (CNP) has been developed by China. It can be calculated numerically by combining various quantitative indices to create a single number held to measure the power of a nation-state. These indices take into account both military factors (known as hard power) and economic and cultural factors (known as soft power).
The index uses critical mass, economic capacity and military capacity. Due to its indicators, it is often repeatable and easy to define, making it comparable to the Human Development Index in understanding and reliability.

Since Pakistan nurses a passionate desire to safeguard an irreducible minimum of its sovereignty in this interdependent and globalized world, one would have taken it as a given that by now our policy makers and geo-strategists would have developed our own CNP index at least on stand-alone basis without any reference to the indices of our close neighbors.
The biggest threat that our economic security faces and which in turn has the potential to seriously undermine our CNP index is the shortage of energy resources. Energy consumption in this day and age generally indicates a nation’s level of industrialization, productivity and standard of living. One hopes our official strategists are aware of this shortcoming and have up their sleeve a fail-safe plan to overcome the problem within shortest possible time.

In this context one would like to suggest that we need to master without much loss of time advanced technologies like artificial intelligence, autonomous vehicles and the internet of things which are merging with humans’ physical lives. Think of voice-activated assistants, facial ID recognition or digital health-care sensors.

Indeed, technological changes are drastically altering how individuals, companies and governments operate, ultimately leading to a societal transformation similar to previous industrial revolutions.

The First Industrial Revolution started in Britain around 1760. It was powered by a major invention: the steam engine. The steam engine enabled new manufacturing processes, leading to the creation of factories.
The Second Industrial Revolution came roughly one century later and was characterized by mass production in new industries like steel, oil and electricity. The light bulb, telephone and internal combustion engine were some of the key inventions of this era. The inventions of the semiconductor, personal computer and the internet marked the Third Industrial Revolution starting in the 1960s. This is also referred to as the “Digital Revolution.”
The Fourth Industrial Revolution is different from the third for two reasons: the gap between the digital, physical and biological worlds is shrinking, and technology is changing faster than ever.

— The writer is veteran journalist and a former editor based in Islamabad.

Source: https://pakobserver.net/age-of-geo-economics-2/

January 28, 2019

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