WITH a new government at the helm, people now look forward to realisation of the New Pakistan dream. But we live in a complex interest-based economic world.

We need to review our whole economic structure (feudal lords, industrial robber barons, money launderers, and their ilk) and IMF conditions. Cosmetic Islamisation of banking only distorted the system.

‘Interest’ is the heart of all economic systems. It is only Karl Marx who did away with interest. Where is an Islamic econometric model prevalent in the present day world economy?

Marx was not clever enough to label his system ‘Islamic model of economics’. Keynes postulated savings are equal to investment. But, in Pakistan, policies discourage savings and encourage consumerism. Locke and other economists say that the government can’t tax without taxpayer’s consent. But, our government picks people’s pockets through withholding taxes and reduction in national savings schemes profits.

Even unissued bonds lying in the State Bank of Pakistan vaults are included in each draw. The prizes on such bonds are devoured by State Bank, without buying them.

Our universities produce schizophrenic economists. They are incapable of analysing complexity of our economic problems. They should study various economic systems and their relevance to underdeveloped countries like us.

Our hidden economy is more than the monetised one. We should pull up our Planning Commission, dust off evaluations of five-year and perspective plans and decide about which economic system to follow. We should set our priorities and go ahead.

We need to understand macro-economic theories that suit our country best. Our public sector has to be primum mobile of capital formation in our economy. Keynesian theories preceded a lot of discussion about gold exchange standard, stable prices.

To create more money, deficit financing (paper money) was resorted to. As a result, the hydra-headed monster of inflation was unleashed.

We adopted a floated exchange rate that ballooned our debt burden. No economist has ever applied his mind to effect, positive or negative, of international debt burden on Pakistan’s economy. No one ever visualised even the idea of ‘odious debts’.

What a pity! Pakistan is reeling under inflationary pressure. Yet there is widespread unemployment. Let the government embark upon public works like Kalabagh dam and geological extraction of minerals from our northern areas.

Saman Malik

Islamabad

Published in Dawn, August 27th, 2018