Imran at WEF

Pakistan remains a country where even the best of ideas is bound to fail because financing terms are impossible to get

Prime Minister Imran Khan chose the World Economic Forum as the venue to go on a rant about the evils of socialism. The only problem is that before coming to power, Imran claimed that he would create an Islamic welfare state — which broadly translates to an Islamic socialist state. Ignoring the irony of him praising his government’s very socialist cash handouts policy during the Covid-19 pandemic, it appears the Prime Minister cannot differentiate between the many forms of socialism and is equating the term with something akin to the model of the Soviet Union or Mao’s China. Perhaps this is why the only capitalism we see in Pakistan is the crony kind. Imran claims that the Pakistan of 2020 was “all about creating wealth” through industrialisation. But who was doing this industrialisation? The same politically-connected elite.

Pakistan remains a country where even the best of ideas is bound to fail because favourable financing terms are impossible to get for those outside of the elite. Meanwhile, the rich are free to steal the ideas and labour of the poor under our abject copyright and labour laws, further consolidating wealth among the cronies. The PM says the wealth generated will be used to lift people out of poverty. He appears to be speaking about some variation of trickle-down economics, a theory tried and miserably failed around the world before he even entered politics.

Nobel Laureate Joseph Stiglitz, a far greater mind than any advising the PM, noted that trickle-down economics does not work. He suggested “trickle-up economics”, meaning focusing on making more money available to the poor which would send benefits up to the rich as well. Even the IMF said that GDP growth declines in the medium term when the top 20 per cent get richer. However, when the bottom 20 per cent get richer, GDP actually grows.

Even his touting of the stock market is astounding. It is well known that Pakistan’s stock market has always been powered by speculation rather than output. Also, the stock market has absolutely no impact on the wealth of a vast majority of people, even in developed countries.

Wages, however, do.

Published in The Express Tribune, November 27^th, 2020.

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