Economy’s primary role
By Sultan Ahmed
“ECONOMY should be in the driving seat in Pakistan, not politics” says Dr Salman Shah, advisor to the prime minister on finance.
He wants Pakistan to be a global player economically as is India trying to do. To make that a reality, the country has to achieve a growth rate of 7-9 per cent, he says.
To achieve that, the political leaders should be in the political seat and not the military, and occupation of that seat should not be eternally controversial. And all deviations from it should be corrected by the judiciary and the Constitution should be upheld by all the political forces and economic players. Dr. Shah wants Pakistan to be a global economic player, in its own interest, but not a mere regional player. That, in fact, demands of each stakeholder to play its due role as outlined in the Constitution and in case of dispute that should be resolved by the judiciary.
That happens in India by and large in letter and spirit and each sector is playing its assigned role though not too efficiently.
The economy has to be in the driver’s seat in Pakistan as it is still a poor country and at least one third of its 160 million population is very poor and overwhelmingly illiterate. Besides, it is a developing country and the people labour hard to earn for a better life desperately. They have been promised a better deal time and again by regime after regime, civil and military, only to add to their disappointment. If one third of the people live below the poverty line of a dollar a day, another one third live barely above that or below two dollars a day.
It is a country where barely 20 per cent people are effectively literate and they relapse into illiteracy too often, more so in the case of women, and there is an acute shortage of skills compared to what the country needs and the world wants. It is a country where too many people are malnourished or ailing and hence unproductive. Industrial progress is held up by the dearth of skills.
The latest World Bank report says that pollution in Pakistan is causing 500 deaths and Rs356 billion economic loss annually. This is a colossal loss for a poor country. Then, there is a massive unemployment and underemployment; elders live much longer than before, and new employment avenues fall far short of the number of people entering the job market each year.
It is a country where the population increases by 1.8 per cent annually as official figures show. The annual population growth was 3.1 per cent in the 1980s and 1990s. But when one looks around, one finds families with large number of children and that makes one wonder whether the 1.8 per cent growth is an understatement.
It is a country where barely 13 per cent of women are in the regular workforce and it has the smallest women workforce in South Asia and it is not doing justice to its women beginning with facilities for going to school and is not profiting from women’s abundant talent. There are too many small children who go to work instead of going to schools. Poverty drives them back to work for a pittance to add to the family kitty. Such abuses have to come to an end.
It is the only country in South Asia where feudalism predominates along with the supremacy of the tribal overlords. Under this system, bonded labour with all its abuses prevails. As some are exposed, more come to light.
Successive regimes had accepted the feudal system and perpetrated it with all its abuses. The feudal system resists change and makes the new leaders accept and profit by it as co-sharers of power. And capitalism in Pakistan is mostly an unbridled capitalism with many of its primitive features, without real competition and a free market and while trade unions have been allowed, the largest industry in the country, the textile industry, relies on the notorious group system for employing workers.
Some labour leaders on their part also usurp the rights of the workers and corruption in the labour departments deny workers their legitimate rights however legally comprehensive.
Such abuses are possible as the number of people seeking employment is much larger than the number of jobs available and the workers are willing to give up their rights for the sake of getting jobs. American scholar Walter Russel Mead who addressed the Institute of Business Administration students recently cautioned the country against the abuses of unbridled capitalism and stressed the need to watch capitalism in action. He suggested a level playing field for all the stakeholders in the economy and measures to ensure real competition. He laid stress on inculcating a sense of responsibility among all the players in the Pakistani economy, for if capitalism was allowed to degenerate into cartels and monopolies, it will be a negation of the basic principles of capitalism .
One way of protecting the consumers in a capitalist order is the steady development of a middle class. But it is not easy for such a class to come up within a feudal-cum-tribal political system with its false values and dubious claims to honour. Such a class will develop with the growth of skilled workers, managerial personnel and sales community.
But a middle class cannot come up in a normal manner if its economy is constantly afflicted by high and sustained inflation. Inflation warps the development of the middle class, keeps it small and socially and politically ineffective and now if the middle class apes the feudal lord its growth will be stunted and political efficacy undermined.
India has a large middle class despite its caste system. Islam has no caste system but in Pakistan we have that, though without the untouchables.
If the middle class has to grow, inflation should be kept below 5 per cent and not the food inflation of 10.5 per cent. Growth of the middle class is affected by the country’s education system. The English and Urdu medium schools create two classes but higher salaries are paid to those educated in English. At the moment most of the benefits of the economic growth inclusive of the advantages of consumer banking go largely to the privileged class and not spread widely.
It is good the import duty on machinery is being done away with, beginning with the machinery imported for the Chinese special economic zone. More such zones should be coming up and Pakistani investors should also have the same relief. The wage differential between the managers of foreign companies and those of Pakistani companies is at the moment very high. Major foreign companies should take the lead in reducing this inequity.
If the economy were to be in the driver’s seat, all other players in the national arena would be in their proper seats and the military would not be playing the political role. If each one plays his assigned role, there will be real harmony among all the stakeholders.

