Policy Brief 13/09/2024
Both Argentina and Pakistan are facing various political and economic challenges. Argentina is a presidential republic with approximately 47 million people. Under the presidency of Javier Milei, the country is pursuing a strict economic reform policy that includes aggressive economic liberalization through a reduction in the size of government, cuts in subsidies, and dollarization to dampen high inflation and public debt which is contributing to social unrest. On the other hand, Pakistan is a federal parliamentary republic with a population of over 252 million. The country is pursuing economic stabilization under international aid to manage a large fiscal deficit and high inflation. However, it has amplified the economic challenges and political fragmentation. Furthermore, the economic freedom index is slightly better for Argentina as compared to Pakistan due to its high GDP and FDI inflow, though Pakistan’s economic environment dampens the opportunity to attract huge investments. Pakistan should focus on pragmatic economic reforms and debt management to effectively resolve fiscal problems and ensure productive use of the funds to avoid unsustainable levels of debt. The strict austerity measures by Argentina has deepened social fragmentation so, Pakistan must carefully evaluate the policy repercussions to manage the social discontent. The rising social and political disparities emphasizes the need for continued dialogue and consensus building in Pakistan’s approach towards social and economic balance. It is also significant to strengthen the institutional structures, foster economic diversification, attract foreign direct investment, and assure transparency in the regulatory frameworks for economic growth and resilience.
