Elite capture versus egalitarianism

Progressive reforms can overcome the structural inequities plaguing Pakistan

It is hard to deny or to ignore the varied inequalities plaguing Pakistan. While there are powerful groups which continue to actively safeguard their vested interests, there are several potential means which can help realise the goal of making Pakistan more egalitarian. 

Unfortunately, Pakistan has long been pursuing top-down models of economic growth, which intersected with preexisting patron-client relations inherited by the country due to its colonial legacy, resulting in stark disparities between the haves and have-nots. Subsequent attempts to create market-based efficiencies have also not been able to create a ‘level playing field’. Instead, the market has served to further entrench the elite capture of Pakistan’s sputtering political-economy. 

Prominent multilateral agencies, including IMF and World Bank, and bilateral donors such as USAID, continue to place faith in market fundamentals such as privatisation and liberalisation as the surest way to promote sustainable growth and poverty alleviation. Yet, more human-centric organisations, like UNDP, acknowledge the need for more progressive policymaking to help address socio-economic inequalities. 

One major reason why poverty remains rampant in rural Pakistan is skewed land holding. Large landowners have turned their sharecroppers and agri-labourers into captive voters, allowing them to acquire political power and use it to preserve and perpetuate their own interests. After some tokenistic attempts to take land from large landholders and redistribute it to landless or small-scale farmers, land reforms were deemed ‘unIslamic’ by the Shariat Appellate Bench of Supreme Court in 1989. No serious attempt has been made to review this decision till date. 

Top-down economic policies propagated in the earlier decades of Pakistan’s formation had created 22 rich families, which came to dominate the industrial sector. This list has become a bit longer over time, with the inclusion of real estate, media and financial sector tycoons, as well as the consolidation of the military’s business conglomerate. However, the Pakistani state remains elite-captured which results in the promotion of lopsided policies that continue to safeguard interests of the influentials rather than putting in place more bottom-up models of development and growth. 

There are, however, several progressive measures which could help overcome the lingering inequities plaguing Pakistan. 

The UNDP has estimated that the Pakistani state has the potential of generating Rs500 billion via halting unnecessary expenditures and through additional revenue collection. A significant transfer of wealth can result from the reduction of unfair elite privileges such as government subsidies which line the pockets of powerful groups such as large sugar growers. Wide-ranging tax reforms which focus on holding larger tax evaders to account, and which try to deepen rather than broadening the tax net, would also bring much needed revenue for increasing public expenditure on health, education and sanitation. Similar efforts can be made to make access to land and capital more equitable as well. It is important to note that funds made available via such measures would not increase the already unsustainable national debt burden. 

Reducing the privileges of the elite and requiring of them to contribute a fairer share of their wealth specifically to support the marginalised is vital but not enough by itself. Simultaneously, the Pakistani state must put in place more proactive policies which bolster the rights of poorer workers in both the formal and informal sector, it needs to further raise the minimum wage and address gender disparities. 

Pakistan has spent years trying to unsuccessfully tackle widespread problems of deprivation, including illiteracy, poor health and sluggish economic performance by relying on elite-led growth strategies. Yet, these tried and tested policies continue to fail in terms of enabling trickle-down benefits to the masses. It is time our policymakers set aside extractive and exploitative economic activities that have led to a stunted human development potential of the country.

The onus of responsibility for overcoming the elite capture of state resources rests with the government itself. It is also necessary to understand how the global economy is also complicit in enabling the widespread inequalities within poorer countries, including Pakistan. Unfair trade policies and ruthless neoliberal policies readily enable local elites to exploit their domestic workforces to serve a global production system that enables exorbitant wealth accumulation at the top by continuing to squeeze those trapped at the base of the global wealth pyramid.

Published in The Express Tribune, June 24^th, 2022.

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