Agreed, that some of the macro-indicators in Pakistan are showing healthy trends or resilience, exports are up, current account deficit is down, remittances are climbing, reserves are stable and the Pak Rupee is holding out, but gauging from the manufacturing and productivity figures over the last two quarters could Pakistans economy be finally sliding into a serious recession? Riding on the back of some positive figures, the economic managers have thus far not only been blowing their own trumpet of success, but also literally ignoring and mocking their critics, who have tried to draw their attention to the missed opportunities and rather weak economic scaffolding that can simply crumble one day without warning like a house of cards Based on industrial production and productivity (especially in the small and medium enterprise sector) Pakistans economy contracted by nearly 4 percent - much more than expected - for at least two quarters running now, which basically means that technically we have already entered recession. Going by this, the big question actually should be that does the country have the political and economic will to fight its way out? The data underlines how the worst natural disaster (floods) to hit Pakistan in decades has foiled all hope of recovery and how the governments addiction to borrow and the absence of visionary economic policies have contributed to the decline leaving the country in a vicious trap of high debt and a low growth amidst a rapidly rising population. The global scenario is not helping either. Serious downturns both in the United States (where the predictions of recovery continue to be proven wrong) and the Western European economies, the two main markets for Pakistani goods, mean that the coming months for Pakistani exporters will be even tougher. All political endeavours on 'trade not aid and preferential 'market access in lieu of our help in the war on terror have also not been fruitful so far. What this basically tells us is that to avoid sinking we need to look inwards and start taking our own measures to embark on a path of economic recovery before the recession turns into an economic quicksand. Time and again, I have pointed out to the examples of China, India and Bangladesh, who have consciously maintained focus on manufacturing at home as their ticket to sustained economic activity and job creation. To help keep their engine of the industry running all related state and private sector institutions, banking/financial, power and energy, human resource, commerce and trade, have played their due role. Our story, on the other hand, has been different, which is basically a tale of shooting ourselves in the foot. Politics yet again has taken precedence over the larger national interest. The countrys economic progress is being compromised by an unwise energy distribution portfolio that has less to do with maximising national industrial output and raising its productivity, and more to do with a political tug of war and skewed priorities, which give preference to consumer goodsover ventures that generate growth and employment. For example, Punjab, which accounts for the bulk of Pakistans industrial base goes without gas for three days a week and with no electricity for nearly 8 to 10 hours per day. Inefficiencies in the management of the oil and petroleum sector are not only the principal factor fuelling inflation, but also significantly adding to the transportation/communication woes of the country. The world of oil is getting complex and gone are the simpler days of a routine differential movements between the Brent and the WTI. Todays dynamics demand shrewd reading of the evolving oil basket along with displaying sound technical skills in determining a requirement-mix that optimises cost benefits: Too much to expect perhaps from a doctor of medicine. With state-controlled communications - Railways, PIA, NLC and PNSC already in doldrums - the acute shortages and prevailing uncertainty in the oil and petroleum sectors are making businesses and people suffer adversely. The age old saying in economics is, you strangulate movement, you strangulate economy. Adam Smith. The bonanza in exports growth may also be coming to an end or may have already come to an end. Surge in the global cotton prices and a high demand cycle in textiles - the main driver of growth in Pakistani exports - have both tapered off over time. With an increased acreage (worldwide) allocation to cotton plantation, the cotton prices in 2011-12 are not likely to show the trend witnessed in 2010-11 and owing to a depressed global textile demand, a problem compounded by Pakistans growing uncompetitiveness due to its rising costs of production, I will not be surprised if we instead see a declining graph in exports over the next 12 months. As for the growth in exports in other sectors like, services, furniture, information technology, tourism, etc., a) the base is so brittle that the slightest change in the international perception or country outlook can erode it, and b) one is not too sure of the figures because one fails to see that how, for example, tourism could have registered an increase Resolving not to borrow or not to accept aid or to solely concentrate on domestic opinions while ignoring global concerns may all sound politically very romantic, but economic prudence requires us to be as much engaged with the developed world as possible, albeit without compromising on self-interest. Even token borrowings carry intangible advantages relating to passing financial stress tests that in turn open doors to other financial undertakings, ratings and perceptions, and most importantly, being in the loop to be able to capitalise on an opportunity as and when one arises. The investors who only a few years back were pouring money and investment into Pakistan are now pausing and saying, where is Pakistan heading in terms of investment opportunities, the corruption challenge and inflation? Investments move and shake when there is 'profit in the markets and regrettably due to management/governance issues the 'profitability per se has been sucked out of the Pakistani markets. It was rather ironic, when last month I was told by a US businessman in my face that he prefers Afghanistan as an investment destination over Pakistan. His reasoning, simple: There may be higher risks, but at least the returns are great. Ask a Japanese and he or she would tell you that recession needs to be feared because it is a very slippery slope. For nearly a proverbial decade now, they have been trying to come out of it. And mind you this is the Japanese we are talking about. As for us, to even stand a chance to avoid the looming economic breakdown, things on our economic front need to change; that too change big and quickly n The writer is an Entrepreneur and an Economic Analyst. Email: