IN the wake of the Napoleonic conquests and the two world wars, the European nations and Japan had greater problems than Pakistan has today. Dresden suffered as much as Hiroshima and Nagasaki.

But immediately after the Second World War, European leaders embarked upon reconstruction. The result is today’s European Union.

The Allies were faced with the nightmare of disbanding the defeated German and Japanese armed forces. It was then that economists suggested innovative solutions (Domar, Harrod, Solow, Lewis, Schumpeter, et. al). Earlier, during the 1930s, Europe had witnessed the Great Depression. The problem of stagnation and widespread unemployment was solved with the application of Keynesian macro-economic tools.

In Pakistan, Ayub Khan sought the advice of a Harvard group of economists. Dams were built and an industrial infrastructure was laid.

The aftermath of Keynesian policies resulted in long-term inflation as a worldwide phenomenon.This was against Keynes’ visualisation that inflation is a short-run phenomenon typical of a full employment economy.

Dr Mahbub ul Haq, a Pakistani economist of global repute, wrote about the short-comings of the Ayub era’s decade of development in a paper: ‘Seven Sins of Economic Planners in Pakistan’ (concentration of wealth and economic power, 22 families, and so on).

Dr Haq later worked in the United Nations and led the establishment of the UN’s Human Development Report which today is used globally as the HDI. The UN-contrived human development index measures the development of peoples’ well-being.

I want to point out that frugality alone cannot be a panacea for all economic woes. The government needs to realise that it is now at the helm of affairs and not perched on a container. We need to employ our youth gainfully. The lesson is clear. It must change gear to deliver.

Ahmed Jabir Mastikhan

Rawalakot

Published in Dawn, October 11th, 2018