75 years of economic dependence

KARACHI:

Three-fourths of a century is gone. The world has evolved at lightning speed given the technological and infrastructure prowess.

Pakistan too has come a long way since gaining independence from India on ideological grounds. Nation has key disturbing events meanwhile but has survived. Is that all we hoped for in a promised land? Absolutely not!

Pakistan’s current economic downfall is a painful reminder of our inability to fully achieve economic independence. Had us as a nation been paying our fair share of taxes – primarily rich and middle class – we would have seen a better Pakistan, a much prosperous Pakistan.

Had our resources been optimally utilised to compete globally with much higher export share, we would have seen a richer Pakistan and an independent Pakistan. Economic independence remains a distant dream. All of us are to be blamed.

Most pressing disruptive cause of instability has been the friction between or caused by the policymakers. Oscillating between democracy and autocracy, Pakistan has never been able to let institutions mature on their own.

Political dynasties have become the driving force of divisive politics of an already heterogeneous community bound by geographical alignment. Owing to the policymakers’ infighting, economic development has been chopped off every time low hanging fruits sprout.

Interestingly – not surprisingly – families involved in politics have accelerated their shift towards the upper elite class. We all know how and why.

You know it’s a sad state of affairs when our central bank chief compares ourselves with the poorest of poor economies in the world to convey message to the world that Pakistan isn’t heading for default.

While we really appreciate the tremendous efforts put in by the ministry and central bank to aggressively push Pakistan’s case in the global arena, it’s a collective 75 years
of economic malfunctioning that has brought us to the pit.

Instead of comparing ourselves with the developing economies, such as Vietnam, Turkey and Malaysia, let alone India and Bangladesh, we have had to defend ourselves
for being economically stronger than the defaulting Sri Lanka.

There needs to be a sense of realisation among the policymakers. Until and unless stakeholders feel the collective admission of guilt, sense of embarrassment and drive to reset and rewire the economic framework from nuts to engines, getting out of the debt trap is going to be out of sight.

A few years ago, Pakistan was perceived as a victim of “debt diplomacy” due to heavy investments coming from China in its flagship BRI initiative. Truthfully, we have no one to blame but us.

Average global life expectancy is around 70-75 years. Born in Pakistan, and having lived their statistical life expectancy, many have left the place with hope and despair.

Some of them let their offspring seek a better life outside Pakistan, causing enormous brain drain in the country, now bereft of the intellectual critical mass. While their $30 billion-odd remittances keep the economy afloat, apparently, this is how Pakistan’s economic books would linger on.

After every balance of payments crisis, youth would be tilted to emigrate – given higher dollar wages – and keep sending a
fraction of savings back to the country. That addresses the risk of economy a “going concern”. Is that enough? No.

Our population has grown to the extent of a ticking time bomb. Today, we do not have resources to cater to it. We are adding a country of Singapore’s size every year to our liabilities.

Our precious natural resources – gas, water, wheat, sugar, vegetables, edible oil, etc – are not adequate to meet our basic needs. Let alone providing quality education, healthcare, railway and road connectivity, job openings, social safety network, child support, pension plans and improved law and order situation. We need to decelerate to avert a socio-economic crisis.

Nonetheless, the average age of Pakistanis is 22 years. History is full of examples where a fractional few have altered the course of society. That requires change in the mindset.

The new electoral mass is digitally connected and aware of the prosperous world outside Pakistan. The politically charged minds (should) question the policymakers for their failures.

Failures are directly proportional to the lack of accountability, which is the root cause of unequal distribution of wealth.

If the policymakers are focused on catering to the short-term needs of their vote bank – relief for traders, amnesty for real estate and subsidies for farmers, we would remain a myopic, anemic and intellectually incapacitated state.

Someone has to fix the house.

The writer is an investment specialist with keen interest in political economy

 

Published in The Express Tribune, August 15^th, 2022.

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