Pakistan blames the Russia-Ukraine war for aggravating the county’s economic woes. The record high energy and food inflation in particular is attributed to the post-war price hike in global oil and commodity markets. The clarity of understanding of the war and its fallout did not translate into visible actions by Pakistan, thus far.

The economic diplomats can better elaborate on the possibilities but some concerned watchers and businessmen feel that the goodwill that the current foreign minister enjoys offers a unique opportunity. They thought familiarity with the world of Foreign Minister Bilawal Bhutto Zardari’s mother Benazir and grandfather ZA Bhutto can help him build an anti-war camp of emerging nations.

“He can charm world leaders and mobilise the youth globally to relaunch a peace movement. He can rally round other affected countries (Sri Lanka, Argentina, Egypt, Nigeria, Kenya, etc) pushed to the brink to pile pressure on warmongers to stop dragging the world backwards and force them diplomatically to stop the war immediately. It will not be hard to show how the war is threatening the foundations of the global order, inflicting pain and suffering all over the developing world,” an articulate observer said.

Read: Zardari says he wishes to see Bilawal as prime minister in his lifetime

No one can challenge that this armed conflict had a massive snowball effect driving up energy and grain prices, forcing central banks to raise policy rates, increasing the cost of living and business, suppressing economic activity, labour cuts and higher jobless levels. Social and political unrest can turn chaotic and violent in many places around the world.

Foreign Minister Bilawal Bhutto Zardari’s heritage may help him build an anti-war camp of emerging nations or he may turn out to be just another ineffectual politician

Foreign Minister Bilawal Bhutto Zardari in a media talk recently hammered Pakistan’s neutral position in the conflict, underlining the highlighted threat to food and energy security in wake of the ongoing war. He claimed to be trying for the war to end through ‘diplomacy and dialogue’. He, however, did not share any further or mention any special initiatives on the details of the strategy adopted to this end.

Relevant sources in Islamabad, senior leaders including Hina Rabbani, Sherry Rehman and cabinet members of economic ministries were approached to get some sense of the progress on this diplomatic agenda with direct bearings on the wellbeing of people and businesses. A PML-N leader said he was too occupied with by-elections in Punjab to spare a thought or offer a quotable quote. Others did not respond till the filing of this report. A senior economic diplomat was travelling and said he had private discussions on the subject in the US but needs time to articulate his thoughts to share publicly.

A senior government source sidelining the issue of the Ukraine war insisted that the worst is over for the country and its people and that the ride ahead will not be as rough. “The government can’t afford to falter or be complacent so it must tread cautiously, desist from the temptation of populism and conduct economic diplomacy skillfully to revive business confidence and put the economy back on track,” he said.

“Expected disbursement of the International Monetary Fund tranche will allay fears of sovereign default and lend stability to the market. Yes, much will depend on the direction of energy and commodity price movement in the global market. Pakistan has taken an independent principled stand on the Ukraine war but it is too big a game for a small nation to influence,” he added.

A businessman upset with Prime Minister Shehbaz’s government’s policies blasted all political leaders. “This nation is hard of luck as far as political leaders go. They are all short-sighted. I am not in the business of issuing a certificate of patriotism but they are responsible for stifling the economy by abrupt changes in policies. How can anyone expect them to negotiate better in the global forums when they can’t deliver back home. They are often so self-obsessed that they ignore the consequences of their actions on the domestic economy, consumers and investors,” he lamented.

The sharp drop in growth in China confirmed the worst economic fears. Clouds of a global recession are hovering as nations continue to grapple with supply chain disruptions after the pandemic and Ukraine war. Record high inflation is driving up interest rates, piling hardships on people and businesses.

“It will be silly to rule out chances of further turmoil when people and businesses perceive painful economic adjustments a punishment for a crime they didn’t commit,” warned a watcher hinting at the charged political environment.

Published in Dawn, The Business and Finance Weekly, July 18th, 2022