According to the Director General (DG) of ADB’s Central and West Asia Department, Pakistan’s economic policy is headed in the right direction as “it would get Pakistan into the league of fast growing Asian economies.”

He further said that Pakistan now “required higher level of investments for job creation through second generation reforms.” In other words, the ADB official is saying that the first generation “reforms” gave jobless growth. If that be the case, is Pakistan, ala the DG, set to get into the league of fast growing Asian economies without all its people?

Whatever “league” Pakistan is set to enter would not be of much interest to the people if they are left behind in the race for a few to catch up to the exclusion of the many deprived? And, how might the result be called development if the target of all development, that is, the people at large are not targeted directly in the scramble for registering high rates of economic growth? Such growth is not just called jobless but is also called. “ruthless, voiceless, rootless, and futureless (and) is not conducive to human development” (UNDP’s Arab Human Development Report 2002. 16). Recently, the World Bank also expressed its dissatisfaction with the government’s performance on poverty reduction.

So, while the lending agencies used to take one view of economic growth and the UN system another, one of the two key lenders is attempting to see the reality. Having said that, the emphasis of all key lenders is on pushing in the same direction in the hope to include the bystanders at some point in time in the future about which they themselves are unclear. Emphasis, therefore, is on second generation reforms regardless of how various lenders may view progress on the first generation “reforms.”

A key mind-boggling issue, therefore, is whether even the reforms to come will lead to growth with equity. Both the World Bank and the ADB are emphasising infrastructure development. The ADB has further decided to provide $12—15 billion assistance to Pakistan over the next three years for infrastructure, utilities, governance reforms, and for the creation of better investment conditions.

While infrastructure and utilities are certainly needed to attract investment, a whole lot of other variables are required to improve the investment climate. Still more is required to ensure that the gains from higher investment are distributed equitably. It might be said that governance reforms are being undertaken for better service delivery. But governance reforms are not just about changing the organisational structures and compensation packages if organisational software of attitudes, style, and skills remains pretty much the same.

It is a fantasy to believe that improved infrastructure will by itself be powerful enough a magnet to attract investors. For, an infrastructure under growing threats of terror attacks will hardly be an inducement. There are serious issues in governance and structures of power in the northern areas that are now fast exporting traditional forms of life to settled areas per force. Currently, there are two opposing forces at work up north. One that wants to join the league of rapidly growing Asian countries through foreign investment and the other that wants to pull the society back in time that will require no investment, no growth, and no integration with the world. The integrative and isolationist forces are engaged in a tug of war with looming threat now that the latter might prevail or influence somewhat. This is a huge deterrent to foreign investment. Even if the integrative forces come to prevail, the concern is that this integration with the rest of the world may not necessarily mean integration within the country. And, lack of integration within marginalises people and provides impetus to the isolationist tendencies brewing fast.

So, an outcome of mal-distribution, inter alia, leads to the rise of forces that deter the variable of investment so strongly desired by the integrationists in the country. If investment climate is to improve, a frontal attack is required on the issue of mal-distribution of assets and income which, amongst other factors, fuel the isolationist tendencies that end up deterring investment.

At the same time, the issue of terror needs to be dealt with head-on so that Pakistan becomes a safe country for foreigners to bring their investment in for the long haul. Otherwise, infrastructure and utilities availability will by themselves not make a case strong enough to induce the investors when the issue of security is writ large on the national canvas and is gaining increasing visibility in the world.

As said earlier, the issue of governance is not just an issue of organisational structure and compensation when the attitudes are hardened in favour of status-quo. By and large, all eyes set on making a fast buck by fair or foul means. In the Islamic republic, there is little appreciation of Islamic teachings and this is the second contradiction mentioned in this piece that leaves us agitated.

On the one hand is the rising influence of the clergy and on the other hand is a growing deviation from Islamic teachings about which the clergy have nothing to say except to focus on the form and effect. This attitudinal outlook of making the most out of a situation in the short-term with little regard for the reason of being of the organisation in question will turn most investment projects into failures and will provide all the more reason for less investment and not more.

Unless the attitudes are made to turn around by inculcating a sense of mission in people, investment will not turn over into better outcomes and will, therefore, not beget more investment. A key challenge in governance is to turn anti-developmental attitudes into development-oriented attitudes by deploying the state-of-the-art in management technology.

Modern management, however, requires a mindset that is based on sharing of power, ideas, profits, honesty, sincerity, sense of purpose, and pursuit of lofty goals in life to realise one’s potential for collective societal gain. The above values are anathema to the mindset prevailing that is driven by a lust for power, money and in ways strictly prohibited in all religions. A major attitudinal turnaround effort is required to make the governance reforms succeed, without which, these will be yet another exercise in making the existing minds sit in new boxes that will make no difference unless the minds have undergone a sea change.

It is the anti-development attitudes that further prevent distribution from growth. For, to stay in the office, alliances are built by the “resourceful” whose power and pelf must maximise before all and in consideration of which they give political support to the rulers who must arrange to distribute first to their political supporters or maintain status-quo in their interest and in their own.

As mentioned previously, it is the state-of-the-art in management in all spheres that will facilitate turnaround in governance and will bring us closer to being what is Islamic in substance. Once Islamic in action, the country will be better equipped to break the monopoly of the clergy on religion. Negative spillovers from clergy’s monopoly will be better dealt with collectively.

Possibility of higher investment and distribution from growth will then arise which is currently smirked at by the sections of society deeply steeped in a “tradition” that should not be ‘ours’. This crucial aspect of reform can be contemplated by no lending bank but must grow indigenously. Otherwise, generation after generation of reforms will not show the results that people call ‘development.’