MANY Pakistanis wonder why India, having attained independence at the same time as we did, has made so much progress, turning into an economic power house and becoming the fifth largest economy of the world.
Some people even envy Bangladesh for its fast growth with exports and reserves much higher and debts far lower than ours, despite absence of any natural resource.
Pakistan has fallen behind many countries, is dependent on external sources for meeting most of its domestic needs, and is struggling to survive on borrowings.
Flawed direction and mismanagement have been the hallmark of successive finance ministers since the exit of the doyen of them all, Mohammad Shoaib in Ayub Khan’s government. The country’s recourse to International Monetary Fund (IMF) over two dozen times will most likely be some kind of a global record.
The reason for the poor performance can be attributed to four critical factors. First, widespread feudalism has impeded economic and political reforms. Feudalism was abolished in India during the early 1950s, and later by Bangladesh as well. Second, there has been a lack of focus on education by successive governments, while the Indian planners gave top priority to the critical sector. India has some world class institutions not only in information technology, but in other fields as well. Consequently, it possesses a large reservoir of skilled manpower — scientists, engineers, IT specialists, energy and water experts, railway professionals, PhDs in various disciplines, etc. — that is powering its economy and fostering newer technology.
Third, we love to import. Since independence, India focussed on indigenisation and austerity, shutting down import of luxury and unnecessary consumer goods. Such import restrictions encouraged domestic entrepreneurship and conserved unnecessary outflow of dollars. Today, India’s central bank coffers are flooded with the reserves of nearly $400 billion. It is self-sufficient in food, having a strategic grain reserve of 80 million tonnes of wheat, rice, etc. It rigidly adhered to the policy of self-reliance and self-sustenance. We did not.
Fourth, it has remained glued to the development model of five-year plans to harmonise progress and advancement. Pakistan abandoned the concept of five-year plans after the Ayub Khan era, and planning is being done on an ad hoc basis.
Many finance ministers have come and gone over the last six decades, but none has been able to put the economy on the right track. In fact, the economy has worsened after every successive govern-ment that has created a debt trap and a weak currency. Unfortunately, no lessons have been learnt from the past blunders.
Published in Dawn, October 11th, 2021