Understanding Pakistan

Published August 21, 2016

Given Pakistan’s continuous flirtation with dysfunction over the past two decades or so — barring a period of stability in the first half of the 2000s — it is surprising that there aren’t more books attempting to ‘put Pakistan right’ in terms of its floundering economy. The other genre, which seeks to understand the roots of Pakistan’s ‘chaos’ and tries to look into the future through a security prism, is a veritable industry. On the economy, however, there have been only a handful of attempts in the past five years or so; eminent as these have been, they have tended towards being a bit arcane and academic for the average reader.

Putting Pakistan Right is the first book to attempt to simultaneously place the country’s current woes in the contexts of both security and economic challenges, in an easy and accessible manner. The writer, Moazzam Husain, is an entrepreneur as well as prolific opinion piece (op-ed) contributor, with a breadth of relevant experience, and the book is a collection of op-ed articles authored over a period of seven years, between 2009 and 2015.

The book neatly spans vast territory: from the country’s “existential” fight against militancy to developments in the Middle East since the Arab Spring, from regional development challenges in South Asia to Pakistan’s energy crisis. However, the author’s forte clearly appears to be the last item on the aforementioned list. This is no coincidence considering his work experience in the energy sector. However, despite this, the book’s coverage of Pakistan’s security challenges is written, for the most part, in a gripping and informed manner, as evidenced by the opening piece on the fall of Sararogha Fort in South Waziristan in 2008.


Putting Pakistan Right is a book that is somewhat restrained due to its format, yet contains ample content worth perusing


The broad recommendations that the various opinion pieces are laced with include: treating the fight against militancy and terrorism as an existential fight for Pakistan’s survival and soul; stabilising the internal security situation and restoring the writ of the state; changing the approach of

Pakistan’s strategic planners and abandoning the policy of “strategic depth” in Afghanistan, which should be pursued simultaneously with opening up economic cooperation with India; and emphasising regional connectivity initiatives while leveraging Pakistan’s geographic position to connect south and east Asia with central and west Asia.

On energy, the main recommendations revolve around improving institutional arrangements for the governance of the energy sector by having a more integrated approach, and for policy thinking to be more holistic by looking at the different components of energy security rather than just focusing on electricity generation, as has been the case thus far.

Broadly, as the book itself notes on its cover, its views on fixing Pakistan — other than on energy — are standpoints and broad perspectives, not a template that policymakers can readily adapt for use. Since the book is, essentially, a compilation of the author’s various op-ed pieces published in this newspaper, the constraints of space and desire to ensure the content is accessible and reader-friendly preclude anything more detailed than broad directional pointers. Perhaps the span of time over which these pieces were written, starting in 2009, also dilutes some of the book’s forward-looking utility, since developments within Pakistan and in the region have been thick and fast in this period. (But, then, given the glacial pace at which Pakistan’s policymakers have responded to economic challenges means that some challenges brought up in this book remain as valid today as they were seven years ago).


“How long will we live with loadshedding? Will the next government be able to fix the problem during its term? I have to admit I have not gone into the party manifestos in great detail. I have no doubt they all have well-meaning and lofty plans of increasing generation capacity, improving the fuel mix, improving distribution efficiencies and tackling the root causes of circular debt. No quarrel with that. There is no shortage of plans collecting dust in the government archives as well. We all know what needs doing. The question is how do you get the plan funded? According to estimates, Pakistan will need $10 billion in capital spending to deal with the power crisis in the coming years and another double this amount to build large dams. Let’s see where we can find the first $10 billion.” — Excerpt from the book


A more fundamental issue is that the book’s foundations constitute the standard ‘liberal’ narrative in Pakistan — internal peace and stability, and peace with all neighbours. As an aspiration, this is the gold standard any sane and sensible country would want to vie for. However, its application in a messy ‘real’ world is always difficult. Take the policy of strategic depth for example, which has caused anguish and angst for decades. With India’s active and “non-friendly” engagement in Afghanistan with a view to increasing its sphere of influence on Pakistan’s western border, can Pakistan truly afford to unilaterally abandon its policy? This will require the US to act as an honest interlocutor to ease Pakistan’s concerns — whereas it has acted in the exact opposite manner, making India’s engagement in Afghanistan a strategic imperative of its policy in the region.

On trade, the standard neo-classical economic model touts that international trade based on comparative advantage is the basis for global prosperity. As an extension, it is also claimed that trade between nations is the surest way to achieving durable peace, as it builds ‘peace constituencies’. The reality can be quite different. Larger countries have sought to use trade as an instrument of domination and influence, if not outright ‘aggression’, throughout history. Take President Obama’s flagship initiative, the Trans-Pacific Partnership trade deal. It is expressly nested within his administration’s Asia ‘pivot’ strategy, designed to encircle and contain China — even though China is the US’s leading trading partner, with trade between the two countries making up a significant portion of global trade. Going back in history, Germany, under Otto von Bismarck, launched wars against France — its neighbour and largest trading partner at the time.

The book makes an observation, and draws an erroneous conclusion, regarding the potential for two-way trade between Pakistan and India. Notwithstanding the ‘gravity model’ predictions on the potential for bilateral trade between the two tense South Asian neighbours, predictions which vary greatly in different studies, the book glosses over the fact that India granted Pakistan Most Favoured Nation (MFN) status in 1996 and, yet, Pakistan’s exports have hit a glass ceiling over the past two decades. On the other hand, even without the MFN advantage, India’s exports to Pakistan have risen faster than the other way around. This points not only to how restrictive India’s trade regime is compared to how open Pakistan’s is in relative terms, but also, as Pakistan’s businessmen have discovered to their dismay since 2011, that there are Pakistan-specific non-tariff barriers in operation to the export and sale of their products in India.

For Pakistan’s exports to India to rise exponentially is not contingent on Pakistan granting MFN status to India, but on a more ‘honest’ bilateral trading arrangement by India. Even without the formal grant of MFN status to India, Pakistan’s trade negotiators in 2010-12 opened up nearly 97pc of tariff lines to India, according to one study. Hence, the views in the book on bilateral trade are somewhat simplistic.

Notwithstanding minor quibbles, Putting Pakistan Right is written by a knowledgeable author and is eminently readable. While its format and nature — based on op-eds published in newspapers — does not do justice to the ambition conveyed by the title, there are enough nuggets and snippets to justify picking up this book. One hopes for a more ambitious follow up from Moazzam Husain.

The reviewer is former principal economic adviser to the Ministry of Finance and currently heads a macroeconomic consultancy firm out of Islamabad.

Putting Pakistan Right
(ECONOMICS)
By Moazzam Husain
CreateSpace Independent Publishing Platform, US
ISBN: 978-1530377251
218pp.

Published in Dawn, Books & Authors, August 21st, 2016

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