THE developing economies are invariably said to be in state of transition. How long that transition lasts or how soon the new order comes to prevail over the archaic system with its varied abuses and gross inequities, depends on how powerful and well entrenched are the upholders of the unjust order, and how persistent and united the votaries of the new system based on equity and justice.
Usually the forces upholding the old order, the forces of feudalism and tribal order, are well entrenched, strong and united, often through inter-marriages, as in Pakistan, while the votaries of the new egalitarian order are splintered, and divided by caste, sect, sub-tribe, ‘biradaries’ etc.
Feudalism is usually the bedrock sustaining the old order in many developing countries and its way of prevailing in most countries is more or less the same.
In most of the Asean countries feudalism was abolished soon after the World War II and education of the masses promoted, as in China, South Korea, Singapore and Taiwan. And under the influence of Confucianism they became pragmatic societies, economic achievers and ultimately Asian tigers.
In some countries where the population is large and its growth high, governments fail to deliver on what they promise. The ASEAN tigers overcame that problem as well and achieved moderate population growth rates.
In Pakistan, we have fragments of various economic systems trying to co-exit or meld. But they are not melding since the efforts to do that are not really earnest and truly persistent. So although we have talked at various times of becoming an Asian tiger, we are far from that except in the economic growth rate, which is pretty good now — 8.35 per cent according to official claims.
We in Pakistan have the old feudal order in the rural areas that constitute 70 per cent of the country. That feudal order co-exists with the tribal system we have seen prevailing in Balchistan or Waziristan. In the cities and towns we have the market economy with all its abuses and maximization of the profits by all means, fair or foul.
We have in additional elements of the Islamic economic system since the 1980s when General Ziaul Haq introduced that. We did not create an Islamic society. Instead he introduced the two major elements of the Islamic economic order: Zakat at 2.5 per cent of the income and savings, and interest-free economy, to co-exist with the interest based economy of Western banking.
But the elements of the Islamic economics were introduced in an upside down manner. The interest rate of commercial banks when interest was abolished was 14 per cent; but that was raised to 17 per cent in the name of mark up, which succeeded the abolished interest, and that made borrowing money far more costly instead of becoming cheaper under the Islamic system.
When it came to Zakat that did not apply to a major sect. Immediately a great many rich Sunnis declared themselves as belonging to Fiqh-i-Jaferia and enjoyed zakat exemption.
Then a part of the Zakat collection was used for political purposes. And there were reports of misappropriation and embezzling of Zakat funds. The World Bank recently raised the issue of misuse of Zakat with the Pakistan government.
Those who wanted to see how Islamic economics would work in Pakistan could have had a good look at the manner the Karachi Stock Exchange or other stock exchanges in the country had been functioning. That is truly a profit and loss-based and interest free institution for those who deposited in shares. Its missteps and foul play are known to everyone and have recently been the object of an intense debate in the country which has not ended.
Now we are having more and more of Islamic banks. And large commercial banks are opening Islamic bank branches or sections in their banks. And the State Bank has said it would give permission for only new Islamic banks. How the new banks function and how their depositors and borrowers gain now remain to be seen.
The government wants to promote free market economy. It is under compulsion from the World Trade Organization, the World Bank, IMF and the Asian Development Bank to do that. But what we are getting is a free market without competition, real, open competition as in the US or Western Europe.
We are exposed more to the abuses of monopoly capital and price-fixing by the openly functioning or clandestinely operating cartels. What we see more often is cornering of the market, hoarding and profiteering. Either there is no official check on them or the checks have failed after some initial attempts at some brusque action against the profiteers.
Free market also demands good governance and timely check of its abuses, but the efficacy of good governance in this sector is totally lacking or too feeble. If the government leaves it to the market to govern itself it will get the kind of results which we see, while fearing worse.
All that has upset a usually cautious official like the governor of the State Bank of Pakistan Dr Ishrat Husain who says “our system provides leverage to the privileged class but deprives the poor of their basic rights.” He urged a major surgery of the system so that its evils could be eliminated once for all and put in place a society based on honesty, merit, truth and professionalism.”
He said: “If I go to a hospital every body there will run for my service, but no one would take any care if a poor man is taken there.”
He deplored “the culture of ‘thana’ and ‘kutchery” prevailing in the rural areas. Even the people not dependent on the feudal lords and who were assisted by bank loans now are victims of the ‘thana and kutchery’ culture. He wanted change in this culture, and the time to change is right now, he stressed.
Voices deploring the prevailing culture in the rural areas dominated by the ‘thana; and ‘kutchery’ are many; but this is the first time someone at a high level from the ruling set up has spoken so frankly and openly.
If raising the support prices for the agricultural products substantially and giving a total of about Rs100 billion as loans to the farmers has not liberated them from their age old culture of dominations by the cops, who are often accused of gang rape these days, the situation needs for more drastic cure or radical surgery as Dr Ishrat urges, here and now.
Who will bring about the much needed change? The ruling class is not interested in bringing about the change. Is more interested in perpetuating the old privileges, while exploring new pastures to add to their wealth and privilege.
When will the country be able to develop a uniform culture based on equity and justice? When will privilege stop reigning supreme? They army is a part of the culture of privilege. And so is the bureaucracy and the new managerial class with it its foreign degrees.
The social and economic change has to come from elsewhere. The masses are more accustomed to rioting and protests than seek an organised change. Even their leaders ultimately tend to identify themselves with the privileged class like some of the former radical members of assemblies or political parties.
The leadership cannot come from the universities as student unions are banned in the colleges and universities. And when they are allowed to have unions they tend to identify themselves with the political parties, and keep on clashing with each other on the campuses, brandishing guns all too readily.
As a result of such prolonged inequity and extensive unemployment, unemployment suicides are becoming much too common and frequent, leaving a large number of children, particularly girls unprotected and un-provided for.
A society which lives within the confines of its own class could not care for such unfortunate children. Neither the old feudal system, nor the market economy nor the Islamic system takes care of them.
The concept of ‘enlightened moderation’ does not take care of the poorest in its midst. The result is discontentment, disillusionment, anger, and ultimately while some seek deliverance through suicide, others take to crimes and a few turn suicide bombers.
