Cursed with opportunity

Last week, Prime Minister Imran Khan once again stressed his government’s vision to turn Pakistan into both an industrial state and agro-based economy. We could brush this off as yet another example of the populist rhetoric that defines our country’s politics. But before we start questioning the competence of our various leaderships, there is another aspect that ought to be examined when trying to understand why both industry and agriculture have not flourished. When it comes to the former, import substitution industrialisation has been an elusive holy grail for many a developing nation. Only a handful, though, have found meaningful success in pursuing that strategy.

There are numerous factors for why some nations have successfully industrialised where others have not. For Pakistan, there are more than a few that come to mind. In theory, with a population as large as ours, we do have at least one prerequisite for an industrial economy — a large population. Successive missteps, however, have kept us from leveraging that into base for economic growth. Some suggest that a navigable river system greatly aids the rise of industrialisation. While it can be debated how crucial it is, nations like the US, the UK and Germany were certainly helped by their geography in that matter. The idea goes that such rivers greatly reduce transport costs, allowing an industrial economy to flourish. A navigable river system or not, Pakistan certainly needs to improve its transport infrastructure for that to happen.

Another interesting aspect for our failure is evident from the PM’s statement itself, which is by no means unique. There is a line of thought that suggests that the success of economies relies as much on constraints as it does on opportunities. For a country like South Korea, for instance, industrialisation was driven in many ways by resources it did not have and the geography it was in some ways ‘cursed’ with. Pakistan, as we are oft reminded, is a ‘blessed’ land. We have factors that could enable us to either be a significant industrial economy or a major agricultural one. Perhaps it is our constant wavering between both that has kept us from being either of them.

 

Published in The Express Tribune, February 1^st, 2021.

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