Societal emancipation through wealth creation

Being poor is not a shame nor is it a taboo, but not trying hard to unshackle the chains of poverty is unforgivable. Likewise, it’s a shame for a nation and a failure of its leaders. In contemporary history, the best example of poverty alleviation is the success story of China.

The credit goes to visionary reformist Deng Xiaoping and Chinese leadership for boldly altering the centrally run economic system, the ‘command economy’ in Leninist thought, to a ‘liberal economy’ in the Western sense. But the Chinese were careful in fully embracing the Western liberal system.

They chose the best of both concepts. Deng Xiaoping coined a new term, ‘Socialism with Chinese Characteristics’.

It meant the application of tenets of the liberal economy to business with the world and strong control inside China to ensure political stability and continuity of policies for effective implementation of the reforms agenda. He said, “Poverty is not our destiny. A communist doesn’t have to be poor. To be rich is glorious.” He also remarked once, “It doesn't matter if a cat is black or white as long as it catches mice.” His concept was, “Let some people get rich first and the coastal areas richer so we can tax them.” With these thoughts, he wanted to break the myth that a socialist has to accept poverty as destiny; “If keeping one duck is socialism, how is keeping five ducks not socialism?” he commented. Before this, communist teaching abhorred wealth creation and personal possessions.

The economic reforms, opening to the world, and capitalising on the opportunities presented by WTO post-rapprochement with the USA, China progressed at a speed never witnessed in history. The successes gained by China in poverty mitigation are enviable.

China, which had poverty at 87.5% in the 50s, has almost nil poverty now. The World Bank report of 2022 states, “Over 40 years, the number of people in China with income below $1.90 has fallen close to 800 million, accounting for three quarters of global poverty reduction… the number of poor people in China fell by 770 million.

By any measure, the speed and scale of the poverty reduction is historically unprecedented.”

This all did not happen with foreign aid and INGO support. The Chinese rulers never went around begging for money nor did they depend upon dole outs based on their geopolitical significance.

Unfortunately, Pakistan developed the culture of dependency on foreign aid as an ally during Cold War 1.0, the war against Soviet occupation of Afghanistan, and then partnering in the US’ Global War on Terrorism (GWOT). The partnership beset instability in our society and engendered economic regression.

We are too great in multiplying our miseries—this time it’s by internal polarisation coupled with becoming hostages to debts, stimulating a quicksand-like situation that is pulling us to the bottomless abyss at a fast pace. How long can we do this to ourselves? The elite thrives and becomes elitist.

The middle class is digressing into poverty. Consequent to the fancy expression of “difficult decisions,” which impact the lower strata of society only, the lower middle class has become poorer in months. The major segment of society is unable to pay the unbearably heavy energy bills that have increased manifold in a few months.

Every country’s citizens contribute towards its continued existence, development, prosperity, and security in multiple ways. State servants, experts, specialists, and entrepreneurs all have individual roles to play.

The state has to protect them and provide a suitable environment for performing their roles in the best manner. The whole effort is to be directed in one direction by the state: comprehensive security with human security and economic prosperity as its core.

Wealth creation is the job of entrepreneurs that the state must facilitate. Only fast creation of wealth can help a country develop and reduce poverty at a faster pace. Somehow, wealth creation has become a taboo in Pakistan. This could be because of corrupt practices of a few, but it doesn’t mean that the state stops affording a business-friendly environment.

While corruption, tax evasion, and smuggling, etc., are to be eradicated sternly, the provision of an environment that increases financial activity, creates jobs, and mobilises more and more people economically is an utmost necessity.

Security of investments, investors, and workers, assurance to repatriate profits, quick mechanisms for dispute resolutions through special laws and courts, and above all, continuity of policies must become part of the national emergency.

Unfortunately, despite being a progressive nation in the 50s and 60s, we have regressed in socioeconomic development. There are multiple examples of countries that were underdeveloped but have joined the league of developed countries through hard work under sincere leaderships and wise policies. China, Singapore, Malaysia, Indonesia, Vietnam, India, several countries of the Middle East, Africa, and Latin America are worth emulating in this regard.

Without blaming any foreign power for our self-destructive behaviour, let’s commence with self-reliance. Cleanliness and hygiene, cracking down on beggars, putting people to work in fields and mines, development of land for agriculture, development of Special Economic Zones, and attracting investments should take the lead. Businessmen have expertise and abilities.

They know how to invest and where to invest. We had offers for investments of billions by friendly countries, but none have materialised. G2G promises normally meet such fates. However, B2B collaboration can help translate G2G engagements and promises well.

The PM office, Ministry of Planning, BOI, and Ministry of Finance MUST reduce the dreaded multi-dozen windows that take months and years for approval of investments. Wealth creation is of extreme significance for the reduction of poverty.

Important conditionalities are sincerity of purpose, continuity of policies, optimisation of nature’s endowments in shaping enthusiastic youth and immeasurable mineral potential.

The writer is a former Ambassador, retired Major General, and President of IPRI.