HOPPING from one crisis to another, Pakistan is a busy place. All the signals may not be pointing in the same direction. Still, the perception of another round of political disruption so early in the democratic cycle has descended a pall of gloom on the country’s business landscape.
A string of news spelling troubles for the government seems to have unnerved potential investors. And all this is happening just weeks after a clean bill of health by the IMF, a moderate improvement in the external sector and some stability in the exchange rate.
Businesspeople, government officials and experts based in Karachi, Lahore and Islamabad pushed different theories to explain the current upheaval. The names of certain members of the military hierarchy, influential people arrested abroad on charges of financial deceit (such as The Abraaj Group’s founder Arif Naqvi), and foreign agencies were mentioned in their narratives.
The bottom line was that troubles magnified for the government as it was not able to satisfy friends who are calling out their favours.
The seeds of the prevailing political confusion indeed lie in politics, but the situation can be reassessed from an economic perspective. And it may help if a probable answer to the most relevant question of all can be located: who does the state in Pakistan primarily represent and serve?
In their manifestoes, all three major political parties promised an inclusive market-based development strategy and a move towards a welfare state.
Prime Minister Imran Khan did succeed in capturing youth’s imagination when he spoke of freeing the country from elite capture. However, in identifying the elite, he directed his guns towards his political opponents and blamed them squarely for all the troubles that beset the country.
Ignoring the question, many frustrated business people were fiercely critical of the current and past governments for being inconsistent in their policies and incompetent in their performance. Surprisingly though, none of them suggested the option of a direct rule, which earlier they used to demand at the drop of a hat.
When the problem was posed to eminent economists, some did share their thoughts. However, in the absence of fresh work explaining the economic malice and structural problems by their fraternity, they had to turn to late Dr Hamza Alavi’s analysis of the state of Pakistan.
In his work on post-colonial states in the 1970s and 1980s, the Marxist thinker and activist found the power-yielding civil and military bureaucracy of Pakistan to be a class unto itself, self-serving its own interests rather than representing and committing to interests of the conventional elite class (capitalists, feudal and royalty).
Dr Ali Cheema, an economist associated with multiple research outfits in Lahore, said, “I think Dr Hamza Alavi’s classic piece (which argues that Pakistan is an underdeveloped country with an overdeveloped state) provides a good framework to answer this question.”
“Elite capture in Pakistan stands on the foundation of two historical legacies: the concentration of power in an overdeveloped state, and its elite, including the dynastic political elite. Although elites balance multiple class interests, they essentially remain responsive to their own interests and the interests of their narrow client base. The governance order in Pakistan has not been open to the wider citizenry,” he said.
“The point is that the elite and elite capture exist in societies, including living socialist societies. The question is: why does Pakistan’s patrician elite serve such narrow interests?” Mr Cheema added.
Responding to the same question, Karachi-based economist Dr Asad Saeed argued that the concept of elite capture is too generalised. “The state itself is fragmented. There are elements of the state that cater to the elite (land grabs, tax breaks, etc.), but the populism of the variety seen at present responds to middle-class angst (school fees, drug prices, utility rates, etc). It is certainly not pro-poor given the lack of attention on nutrition, public health, public education, sanitation etc,” he said.
Dr Nadeem ul Haque, a former deputy chairman of the Planning Commission, expressed frustration over the populist tendencies in educated segments and social reluctance towards serious inquiry. “Elite capture is a good concept, but it is incomplete,” he said, and advised people interested in his views on the subject to read his book.
His latest publication, Looking Back: How Pakistan Became an Asian Tiger by 2050, traces the causes of the limited success of the country to disruptive effects of donor agencies involvement and the intellectual passivity resulting in lack of home-grown solutions to deep-entrenched problems.
A retired bureaucrat in Islamabad found the lack of accountability and the culture of patronage to be at the root of the problem.
“Corruption is not a political but a societal issue in this country. People are as corrupt as they can afford to be. They abuse their position to the hilt to evade responsibility irrespective of their social or economic standing,” he said. “Right from the doorman to the boss of all bosses, Pakistanis jostle for both earned and unearned privileges. How far they succeed depends on a variety of factors that rarely include scruples.”
“The voiceless masses in Pakistan continue to barely survive in subhuman conditions. The middle class at least succeeds in creating noise for demands such as affordable utilities and social services. The elite (traders, manufacturers, technocrats, etc.) miss no opportunity to wave their wish list in your face. It must be taking some doing on the part of the government, though, to keep everyone unhappy all the time,” he said.
“It’s lame to expect the government to become efficient and caring voluntarily. There is a need to strive harder to force the government to be responsive to the needs of the masses and demands of productive sectors,” the bureaucrat added.
“But things, in the end, are not as bad as sometimes they are projected to be,” commented an incorrigible optimist unwilling to own his comment. “The chattering classes suffer from some kind of depression. How can we forget the distance covered with sacrifices of brave men and women in the march towards the future in Pakistan?”
He believed that democracy, despite setbacks, is growing roots. “Mobile phones, the Internet and the electronic media are connecting people like never before. Disruptions are not necessarily always bad. They are also associated with progress.”
Published in Dawn, The Business and Finance Weekly, November 25th, 2019