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Building an economy for the future

The distributive nature of growth must form part of a revised and appropriate social contract to include hitherto excluded regions, genders, and individuals  

By Dr. S Akbar Zaidi

In the late 1960s and early 1970s, the term ‘Asian Tigers’ became synonymous with high economic growth based on the achievements of four East Asian countries — South Korea, Taiwan, Hong Kong and Singapore. All four countries focused heavily on manufacturing and industrialisation, and all four were largely authoritarian and undemocratic, either under military rule or strong civilian leadership. In the 1990s, other countries in the region, notably Malaysia, were also accommodated in this broad category of miracle economies. The biggest tiger of all was, of course, China, followed by other smaller countries, including Vietnam. The term ‘Asian Tiger’ became an aspirational term, connotating, an ideal to be replicated by other countries. On many occasions from the 1960s onwards, Pakistani leaders, both elected and otherwise, pledged to make Pakistan an Asian Tiger. As is apparent, not only has Pakistan not become an Asian Tiger, it still lags behind other South Asian countries in key economic and social indicators. Back on 18 January 1965, the New York Times wrote that ‘Pakistan may be on its way towards an economic milestone that so far has been reached by only one other populous country, the United States’, a view which was endorsed by the Times from London a year later, stating that ‘the survival and development of Pakistan is one of the most remarkable examples of state and nation building in the post-war period’. Clearly, things have been rather different since.

One can identify numerous reasons for why the potential and prospects of Pakistan came undone. A reason often cited is the dominance of the military in Pakistan, making it a praetorian state, not allowing economic and social development to take place, but this argument fails to explain why other military-dominated and authoritarian states have developed markedly. Ethnic and regional imbalances, with the freedom of East Pakistan from a largely (then) Muhajir and later Punjabi dominated bureaucracy and military is an explanation which is often given, where the dominance of a Punjabi military-bureaucratic set-up undermined the development aspirations of Sindh, Balochistan and Khyber Pukhtunkhwa, keeping them underdeveloped. Constant changes in systems of governance, with the military dominating even elected civilian governments, is yet another explanation given, as is the fact that the elite in Pakistan, both military and civilian, have never reached a consensus on how to govern and implement an inclusive economic programme. One cannot also ignore Pakistan’s geostrategic borders and the fact that there have been contentious and often conflictual interchanges on both Pakistan’s borders from as early as 1948, becoming more complex and intense since 1979.

Without greater regional economic integration, Pakistan will continue to remain an outlier — dependent on foreign aid and politically-motivated economic projects

Perhaps all these, and many other reasons, offer a partial explanation of why Pakistan has failed at achieving any fulfilment of its promise. Yet, there has also been progress, albeit clearly insufficient and unacceptably little, in terms of the diversification of its economy, through modernisation, with per capita incomes rising, the buoyant growth of a middle class, with women becoming increasingly prominent in the economic, social and political sphere, and as other indicators suggest. Still, compared to other countries in South Asia, particularly Bangladesh and India, Pakistan continues to trail. Pakistan seems to be caught in a low equilibrium trap, both economically and socially, compared to many other countries which are fast progressing and in the process of development.

One can give a long prescriptive to-do list for policy makers to look differently at the near and distant future of Pakistan, but such wish lists are often quite simply based on wishes rather than informed by Pakistan’s political economy considerations. Only those policies are found to be workable which are contextualised and derive from existing and emerging economic transformations and political settlements. Some, even, partial consensus amongst the elite, despite party affiliations and institutional differences, is a key starting point. How do members of this elite envisage Pakistan’s future? Some interventions, even though difficult, must be agreeable to all, such as raising Pakistan’s taxation collection based on income and wealth earned, must surely be one such item on anyone’s list. Far greater stability and better relations with Pakistan’s neighbours, has also to be on the agenda, even of the military. Without greater regional economic integration, Pakistan will continue to remain to be outlier, continuing to be dependent on aid and politically motivated economic projects. Greater and more substantive democracy is also bound to hold elected representatives more accountable, and with increasing political and democratic competition, perhaps make elected representatives more eager to demonstrate an inclusive development paradigm. The emerging middle classes and women, the latter as a separate economic and social category, also require focused attention, although with growing inequality, numerous social protection measures, including the right to work, a decent and enforceable minimum wage, and more aggressive redistributive measures, from land, to opportunities, must focus on Pakistan’s underprivileged. The distributive nature of growth must form part of a revised and appropriate social contract to include regions, gender, individuals, and the excluded.

While a list can be as fertile and endless as one’s imagination, real and practical measures will need to work on what can be done, what ought to be done, and how these goals will be achieved.

(This essay was first published by Jinnah Institute’s Independence Day special feature)

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