Written by Laurence Brahm - Published by South China Morning Post on 03/13/2007

Lahore’s ancient, labyrinthine streets are filled with traffic, the scent of spices and the buzz of motorcycle-driven “rickshaws”. Chinese exports dominate the motor-rickshaw market: even the oil consumed by these exhaust-belching vehicles comes from China.

In fact, some 70 per cent of all electronic and household goods sold throughout Pakistan’s bazaars are exported from China. The dams and hydropower systems to provide the country’s future electricity will also come from there.

China’s economic presence can be felt all across Pakistan. But there is no sense of rivalry or concern over market dominance. Relations between the two countries could not be better. In a way, Pakistan is confident of its own comparative advantages.

Its progressive and creative media industry already exports rock groups to India and launches dozens of new television networks. Its hotel and food-beverage service industry could potentially put more snobbish European hoteliers to shame.

Much of China’s industrial and export growth, however, has been assured through a level of domestic security that Pakistan lacks – due to continuing conflict in Afghanistan and tensions in Iran, both on Pakistan’s borders. Such perceived instability has sharply curtailed Pakistan’s growth.

But do not underestimate its potential. In some ways, Pakistan’s economy is preparing for liberal leapfrogging.

Pakistan’s macroeconomic reform programme might be said to mirror China’s, with a three-pronged focus: privatisation, liberalisation and decentralisation. Li Donglin, a Chinese citizen who directs the UN’s International Labour Organisation in Pakistan, is optimistic. “Privatisation is occurring at an even faster rate here than in China,” he said.

Sectors including telecoms and the media – considered too sensitive and off-limits on the mainland – have already been privatised in Pakistan. “As for the pace of China’s privatisation, it is not fast enough,” said Mr Li. “You must go through the pain of childhood to enjoy family life later. China is not willing to take that pain. So it is possible that Pakistan will leap ahead.”

Regardless of differences and similarities in development, experiences are being shared between China and South Asia. Their new, emerging regional model for development is one based on experiences – coping with hard conditions and realities as they exist, not as theorised in the laboratories of American east coast think-tanks or universities. So these practical solutions may work.

New models for economic development are emerging from the nations that come together at the Himalayas: China, India, Pakistan, Nepal, Bangladesh and Bhutan. Nepal has offered its own set of solutions for peaceful convergence – bringing the Maoists, with their social alternatives to the International Monetary Fund’s political agenda – into a coalition government.

Bhutan speaks about “GDH” – gross domestic happiness – as a new measure of growth. The success of Bangladesh’s microcredit model, pioneered by Nobel Peace Prize winner Muhammad Yunus, is spreading throughout the region.

“A new value system is required, calling for closer international economic and [more] balanced trading relationships, involving a shared-help developmental model,” said Pakistan’s Foreign Secretary Riaz Mohammad Khan in a private meeting.

Will a Himalayan consensus arise from these developments?

China’s political stability made its economic transformation possible, reflects Mr Khan over cups of chai. “While its political framework may be contrary to some sterling human rights values, the change China has brought about has helped reduce poverty. Four hundred million people have been brought out from under the poverty line in China.

“In Pakistan we are struggling with poverty and looking at alternatives. We advocate what China has achieved.

Trade is more important than aid. Build value for the population.”

Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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