Pakistan: A Surface-Level Analysis of Pakistan’s International Economic Agreements and their Strangulatory Impact on the Economy

Muhammad Ashfaq Ahmed, Nasreen Nawaz and Muhammad Raheem Awan

MPRA Paper from University Library of Munich, Germany

Abstract: The international economic system that evolved after WWII, which was conceived by and rolled out on behalf of Global North states, essentially stood on a tripod of international economic agreements (IEAs), that is, International Investment Agreements (IIAs), Double Taxation Agreements (DTAs), and International Trade Agreements (ITAs). The ostensible purpose of these IEAs was to (a) facilitate cross-border deployment of surplus investible capital, (b) export of finished and capital goods, and (c) allocate favorably taxing rights between on various incomes earned by multinational enterprises (MNEs) in overseas jurisdictions. Intuitively, when these IEAs are signed by and between states at par level of economic development, their resultant economic outcomes would be equal or near-equal. But when such agreements are signed in asymmetrical bilateral economic settings, that is, between a developed and a developing country, the resultant economic outcomes would most likely be lopsided and inimical to the economic interests of weaker partner in the equation. From the Global South perspective, these IEAs expose developing countries to international arbitration on account of suits filed by investors, erode their tax base by allowing MNEs to enter aggressive tax planning ploys, and undermine their export competitiveness vis-à-vis stronger economies. The paper premises that developing countries that signed more of these IEAs, would find themselves in a deeper trouble than those which signed less of them, and that countries that signed the IEAs in a quicker span of time, got into trouble quicker, too. In this connection, Pakistan is brought in to undertake a surface-level time-series analysis of its signing IEAs and the corresponding trajectory of select economic indicators over the past seven decades.

Keywords: Free Trade Agreements; Bilateral Investment Treaties; Double Taxation Conventions; International Investment Agreements; Global South (search for similar items in EconPapers)
JEL-codes: F0 F1 F3 F5 F6 (search for similar items in EconPapers)
Date: 2024-03-03, Revised 2024-04-01
References: View references in EconPapers View complete reference list from CitEc
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Published in Journal of Asian Development Studies 2.13(2024): pp. 40-59

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