THIS is my third article on higher education in Pakistan and on the role being played by the Higher Education Commission. In this piece, I will explore two areas where public policy has failed to venture as aggressively as it should. The areas I have in mind are the teaching of social sciences and the use of social sciences to make public policy.

Much of the effort being put into the educational system by the HEC is on improving the teaching of science and technology. The commission has not committed the same kind of thought and energy into the development of the social sciences or establishing an infrastructure for undertaking public policy analysis and research.

When I talk of the social sciences what precisely are the disciplines I have in mind? And when I mention public policy analysis, what exactly do I have in mind? In order to answer these questions, I will attempt a number of simple definitions.

By the social sciences I mean a fairly wide array of subjects that study and record human behaviour, and also analyse the situations in which human beings live and work. The subjects that are concerned with these areas include economics, political science, sociology, anthropology, geography and, of course, history. The sciences, on the other hand, include physics, chemistry, biology, geology and astronomy among others. These disciplines help us to understand how the human body works and how the environment in which human activity takes place functions.

Public policy and technology are the ways in which the social sciences and pure sciences are used to apply the knowledge acquired through learning. Public policy refers to the choices governments and other organisations make to improve human welfare. Technology is a vast area of human endeavour concerned with the application of knowledge gained from the sciences to manipulate the environment.

The study of the various sciences helps us to understand how nature works; the study of technology makes it possible to apply that knowledge to improving processes and products. The development of science and technology helps productive systems to improve their productivity — the amount of output that can be obtained by a worker engaged in the productive system, the capital that he or she uses and the methods that employed in producing the output. For productive systems to function efficiently, the pure and social sciences must interface; they must interact with one another. When I talk of productive systems I mean not only factories, farms and shops but also political and social systems. After all, economists now recognise that the efficiency of output depends not only on the application of the conventional factors of production, but also on the accumulation of knowledge and the presence of social capital. The latter two “inputs” into the production of system are themselves the products of political, social and cultural systems.

It is my impression that Pakistan, in spite of the well recognised neglect of all education — not just higher education — has done better in the sciences and technologies than in the social sciences and public policy. The only Nobel Prize won by a Pakistani was in physics while in economics the country produced only one economist — the late Mahbubul Haq — who could be ranked among the great development economists. The country accumulated enough scientific and technical knowhow to master the intricate processes involved in making fissile materials, using these materials for making atom bombs, developing missiles that could be fitted with these weapons, and continues to improve the range and performance of these weapons. Social scientists cannot claim any such success.

Before suggesting ways for strengthening the base of the social sciences in the country, it may be useful to examine briefly how the world of science and technology is being reshaped by the arrival on the scene of two giant suppliers of this expertise. As Michael Schrage of the MIT and the Swedish Royal Institute of Technology wrote recently, “India and China produce nearly one million engineering graduates a year compared with about 170,000 such graduates from the US and Europe. Even if one (arrogantly) presumes that only the top 10 per cent of the Indian and Chinese students are as talented as the top half of the Americans and Europeans, the Asian giants graduate more quality engineers than the West.

“In the face of this demographic deluge of human capital investment, the scientific, engineering and policymaking establishments of Europe and America propose sharply to increase the number of science and engineering graduates. Eurocrats in Brussels are pushing for a new European Institute of Technology; America’s National Science Academies are calling for greater investment in science and technology. More and better homegrown students are deemed essential to global high-tech success.”

Schrage does not believe that such a strategy makes any sense considering the globalisation of education and the production processes. What makes sense for the developed countries is to take advantage of the large supply of extremely well-trained workforce from Asia — these “cheap smarts working in cognitive sweatshops” — that are available at a fraction of a cost of their European and American counterparts. “For the US and Europe, increasing the numbers of science and engineering graduates seems a policy prescription of economic despair. Creative differentiation — not competitive confrontation — is the real human capital challenge.”

What is the relevance of this analysis for a country in Pakistan’s situation; a country with a large, growing and young population that, like India and China, could also become a supplier of skills and knowledge to the rest of the world? Pakistan should not be intimidated by what Scharge calls competitive confrontation in the field of technology. The HEC seems to have accepted this challenge and I believe it is right in approaching this field of endeavour from that perspective. However, the focus should be on improving the domestic situation — in creating the base of knowledge that is relevant for domestic needs — as well as taking advantage of the demographic asymmetry that is producing so much ferment in the way in which world economies and social systems are interacting with one another.

By demographic asymmetry I mean the sharp differences in the rates of population growth in developed and developing countries that is making the former increasingly dependent on the availability of manpower from the latter. It is for this reason that achieving a balance between the physical sciences and technology on the one side and the social sciences and public policy on the other makes a great deal of sense.

The need, it should be emphasised, is not to shift the focus from the pure sciences to the social sciences, but to bring the latter up to par with global standards. That will happen to some extent as a consequence of the reforms that have already been planned and some of which are already being implemented. But some other steps need to be taken as well. I will list at least four of these as areas of high priority. They are designing new curricula; improving textbooks; improving the quality of teaching; and setting up institutions of public policy.

First, improving the curricula used in public schools. This must include all the social sciences mentioned above, some as compulsory subjects and some other left to be chosen by the students. History and economics should be taught for at least four years during the 16 years students are now being required to spend before they graduate. Why should there be so much emphasis on these two subjects?

I am struck by the absence of knowledge in the country not only about world history but also about the history of Pakistan. It is not possible to become good citizens and to take part in governance without a knowledge of history. History is not simply facts and events strung together in a chronological order. It means understanding how society has been shaped by people and events — not just people and events inside the country but also outside it. Even economists in Pakistan don’t fully comprehend how the structure of the economy has evolved since the country gained independence. Structures cannot be changed or developed unless their foundations are located.

And the knowledge of economics helps since, as Alfred Marshal wrote in 1890 in the Principles of Economics, it is a study of mankind in the ordinary business of life. A very good illustration of the way economics helps to understand how people behave is a recent book by Stephen Levitt. In Freakonomics, a bestseller in the United States, the author applies the basic principles of the subject to understand how people behave and how societies function: for instance, why criminals choose crime as a way of living, why one social class discriminates against another, why parents have more children than they can afford to bring up, etc.

According to Levitt “the modern world, despite a surfeit of obfuscation, complication and downright deceit, is not impenetrable, is not unknowable and — if the right question is asked — is even more intriguing than we think. All it takes is a new way of thinking.” Economics certainly helps in that endeavour.

While enlarging the base of knowledge for all students no matter what their principal interest happens to be — when I was a student of physics in Pakistan, I didn’t have to take courses in the social sciences — course work in colleges and universities must prepare people to be better citizens of the state. But designing curricula alone will not do that. The students must also have access to good textbooks and good teachers. That is not the case in Pakistan.

Some school systems in the country use books published abroad; that also is not a good option since the teaching of social sciences must be embedded in local cultures and the local environment. The Higher Education Commission should develop a programme for encouraging scholars to write textbooks for students at different levels.

There must be quality control — a function that can only be carried out by peers — as well as appropriate incentives for the authors of textbooks. In so far as the task of improving the quality of teaching is concerned, I have already commented in previous articles upon the emphasis being rightly placed by the HEC on this aspect of educational policy.

Finally, there is an enormous need to create capacity to do work in the area of public policy. This needs to be done by institutions that are controlled neither by the government, nor by political parties, nor by interest groups. They need to be autonomous, funded in ways that would bring objectivity to their thinking and recommendations. Much, if not all, of public policy in Pakistan has been made in the absence of independent analysis. Only occasionally, most notably in the case of President Ayub Khan, have governments set up commissions or study groups to investigate an area to inform the making of public policy.

In sum, I believe the government and the HEC are on the right track in improving the quality of higher education in Pakistan. The only additional efforts that are required are in the areas of social sciences teaching and public policy research and analysis.

WHILE the press and the political parties, and even the army high command, extol the virtues of democracy in Pakistan, our social and political culture remains authoritarian and intolerant.

The first condition for democracy to take root is that the prevailing culture should be one of tolerance, and dissent should have legal channels to express itself. This is ensured in the public domain by a vibrant press, although the latter’s job is far from easy because it is owned by rich and powerful people who do not want to be hurt by the powers-that-be.

Second, the government gives advertisement and quotas of printing paper which is misused to twist the arm of newspapers if they stray too far away from the ‘party line’.

Third, journalists are either bribed or intimidated so certain stories are never printed. Very damaging stories are killed by editors and some are suppressed by intrusive owners and the state machinery. In short, the kind of press we have in Pakistan is nothing short of a miracle. The few really good journalists, columnists and editors who have enhanced the prestige of the press, especially the English-language press, are creating the first condition for democracy.

The second major condition is the presence of political parties. These may be many in number, but the ideal condition is the existence of two major parties with the rest constrained to join the one or the other. The large blocs of liberals versus conservatives and Republicans versus Democrats, respectively in the UK and the US come to mind.

In Pakistan, we did have the slightly left-leaning PPP and the slightly right-leaning Muslim League. Now we have the extreme (religious) right-wing, the MMA, with the ethnically-oriented MQM as a powerful presence in Sindh. Pakistan’s major political force, however, is the army. The army has never accepted civilian supremacy as a large number of interviews of senior army officers, from Ayub Khan onwards, indicate. Moreover, each interlude of military rule increases the role of the army in politics and creates more financial and other interests for serving and retired military officers who are protected through the exercise of political power. This is a major drawback of military rule — the military gets bogged down in politics forever. In Pakistan, the military intervenes in politics directly and then puts on a civilian facade. It also seeks civilian allies. These used to be great feudal lords, like the Nawab of Kalabagh, during Ayub’s tenure, but now they are religious leaders and ethnic politicians (MQM) in Sindh. The role of the religious right is to keep the centrist political parties — in this case the PPP and the Muslim League (N) — from power. The political vacuum thus created is filled by non-democratic forces.

Whether Nawaz Sharif and Benazir Bhutto would be able to come back to fill in the gap is not clear as yet. Their past record is certainly against it. Both showed little respect towards each other when they were in power. Both have made overtures to the military to get the other removed before the legal tenure as prime minister was over. Both have victimised each other disregarding the fact that this would only strengthen the religious right, the ethnic parties and the military.

So, more than the alleged corruption of the two leaders, their main failing so far has been that they have shown little regard for the norms of democratic behaviour. Whether the present circumstances will change all that and really create democratic versions of the PPP and the PML-N chiefs is yet to be seen.

The third condition for democracy is that the public discourse should value it and understand what it can achieve and what it cannot. Unfortunately, public discourse in Pakistan neither values democracy nor knows its limitations. The ordinary people in the fields, the factories, the kitchens and the streets have not seen anything but exploitation in all forms of rule.

They have always trusted the rhetoric for votes — especially Zulfikar Ali Bhutto’s promise of socio-economic justice — and been disillusioned. They now know that if they vote they should extract patronage (a job for a son, the building of a road, a school, etc.). Middle class people, with right-wing opinions in the major cities, are so upset by stories of the corruption of Benazir Bhutto and Nawaz Sharif that they would prefer to throw out the baby with the bathtub.

In Punjab, where so many families are directly tied to the military, they do not mind a benign authoritarian government — at least when military governments first take over. The upper classes, which often espouse the cause of democracy in principle, are often wary of the populist rhetoric of most civilian leaders. This populism sometimes appeals to the sense of equity which frightens them because they are rapacious elites.

When populism appeals to religious sentiment, they are afraid of being dominated by Taliban-like Islamic police. In short, the upper classes, too, are not too uncomfortable with non-democratic rule.

Then there is the question of expectations. People confuse democracy with good governance. The two are not identical: democracy is a form of rule which may or may not result in good governance; good governance refers to efficiency, and authoritarian governments (as in Singapore) may deliver it even better than democracies. One values democracy because it ensures that the leaders do not become tyrants, that they can be removed through legal and well-established processes and, above all, because it is possible to express dissident opinions.

Indeed, it is because some kings were despots and they could not be removed, that the idea of democracy first appealed to the people. It does not appeal to many Pakistanis because even military rulers do not suppress the people of the urban centres, especially in Punjab, excessively.

The military action in Dhaka in March 1971, the repeated military operations in Balochistan; the crushing of the MRD movement in Sindh in the 1980s and the on going Fata operations are not registered by ordinary opinion-maker in urban Punjab. At present, in these opinion-forming urban centres, there is no memory comparable to the Saddam regime in Iraq or Iran under the Shah. The urban areas of the Punjab and the NWFP have not seen the brutal side of military rule.

While the memories of Sindh and the other parts of the country are peripheral for the opinion-makers in urban Punjab, they feed the ethnic or religious resistance to the centre. However, the smaller provinces do not trust majoritarian rule, the major corollary of democracy, anyway since in their view this boils down to ‘Punjabi’ domination. In short, either there is no memory of oppression during authoritarian rule in Pakistan or there is such a memory but it contributes to ethnic, not to national, politics. In any case, Z. A. Bhutto, a democratically elected ruler, was possibly more authoritarian and more oppressive of Baloch aspirations than any non-elected ruler of Pakistan. Thus, Pakistani discourses do not value democracy as a gift to be preserved.

That the dream of democracy survives in Pakistan is a blessing. We can thank the British for introducing that concept and the political activists, intellectuals, the press, NGOs and bar associations for having supported it. But ‘civil society’ is fragmented and weak and needs new converts to the democratic dream. This can happen by making its virtues known to as many people as possible. This is where newspapers come in. They are the guardians as well as the creators of democracy in Pakistan.

I THINK I have finally caught the Oxford English Dictionary. Look up “volatility” in the online dictionary (it’s addictive, I warn you). Among the definitions you’ll find are, “readiness to vaporise or evaporate,” “tendency to lightness” and “capacity for ... rapid movement.”

Time for an update, guys. You’re missing a definition of volatility that has been in daily use in the world’s stock markets for years. And this kind of volatility — the financial sort — is giving the global economy a fright.

First, let’s define volatility in a way the dictionary omits. It’s a statistical measure of the frequency and amount of movement in the price of a security. If, for example, you buy a share and, during the next 12 months, its price scarcely changes, then it has low volatility. But if it jumps 5 per cent on day one, falls 10 per cent on day two and so on, then it has high volatility.

Last week, after years of drifting downward, financial volatility came back with a vengeance. Stock markets dived at the very moment they were approaching their pre-dot-com-bust highs. US equities are down close to 4 per centfrom a month ago. In London, the drop has been just under 6 per cent. Some emerging markets have been hit with cumulative four-week declines of 9 per cent or 10 per cent.

And it’s not just stock markets that are suffering. Commodity prices have been on a roller coaster — especially copper and gold — soaring to records and then falling sharply back.

As usual, financial analysts have an explanation. The latest inflation data in the US “surprised on the upside,” as they say on Wall Street. Core inflation, excluding food and energy costs, is running at an annual rate of 3.2 per cent. Surveys suggest that people expect inflation to rise higher. This puts the relatively untested chairman of the Federal Reserve, Ben S. Bernanke, in a quandary. Should he set interest rates higher, to dampen inflationary expectations? Or could that spark a crisis in the already slowing US housing market and a spasm of pessimism on the part of highly indebted consumers?

Such short-run explanations are characteristic of both Wall Street and London, where vast significance is often attached to a single indicator or word uttered by the Fed chairman. Question: Why, only a year ago, were so many of these same analysts happily heralding “the death of volatility”? The answer is that they were indulging in what a financier of an earlier generation, Siegmund Warburg, would have called “wishful non-thinking.” Measures of volatility had declined since about 2002. The happy non-thought was that these trends could continue indefinitely.

Here’s what was happening. Fears that the dot-com bust (or 9/11) might cause a 1929-style Wall Street crash were dispelled as former Federal Reserve Chairman Alan Greenspan pumped low-interest liquidity from the Fed to the markets. American consumption soared as asset-price inflation moved from the stock market to the property market. Meanwhile, the possibility of a 1997-style Asian crisis receded as Greenspan’s counterparts in Tokyo and Beijing accumulated huge reserves of dollars. The world’s financial markets trended smoothly upward in unison, and down went volatility.

But all this was based on a manifestly unsustainable process. The booming US was importing vast quantities of Asian goods, paying for them with IOUs in dollars. Driving the boom was the readiness of Americans to remortgage their houses and save not a cent of their incomes. Most economists could see roughly how — but not when — this spiral of international and domestic debt accumulation would end. The dollar would start to weaken. Inflation would start to creep up. The Fed would raise rates. Consumers would tighten their belts. And if any of this happened with a jolt, then volatility would be back. Textbook stuff.

Nevertheless, as often happens in financial upswings, academic theories were formulated to give the appearance of rationality to the wishful non-thinking. A new international monetary system had come into being, we were told, modelled on the postwar Bretton Woods system, in which Asians pegged their currencies to the U.S. dollar and enjoyed rapid and risk-free export growth. It was a “stable disequilibrium,” others suggested, oxymoronically. The U.S. wasn’t really running a huge deficit; it was exporting some magical “dark matter” not captured by the official statistics.

I, too, had a go at rationalising the prevailing exuberance, suggesting that foreign investors might not mind lending vast sums to the US at trivially low rates of return if this was a kind of tribute to the American empire, paid in return for the benefits of the Pax Americana. My point, however, was precisely that this could not go on for very long. After all, the empire can continue to collect its tribute only if the pax it provides is real and has legitimacy.

Unfortunately, the American project of transforming the greater Middle East has run into increasingly obvious trouble since the invasions of Afghanistan and Iraq. Indeed, mounting political risk in the region has been one of the drivers of higher oil prices - yet another source of renewed volatility.

Come to think of it, perhaps “readiness to vaporise or evaporate” isn’t such a bad definition of volatility after all. —Dawn/Los Angeles Times Service