We have had these recent rantings from a short-term fi­nance minister explaining how Pakistan is a haven for the elite (the 1 percent) wherein the masses are being seriously short-changed.

Well, in any case, there is nothing new or original that he is telling us, as Stiglitz and Piketty have now been talking about this phenomenon for years, albeit more so from the perspective of the developed economies than the devel­oping ones. The argument is that once wealth is creat­ed, ways, means, and the will in policymaking should be instilled that all aim at ensuring upward mobility to the ones who are born outside the ambit of the wealthy or the so-called ‘elite’— the 99 percent vs the 1 percent.

However, having said this, there exists a broad consensus that the way to achieve this is not through socialistic measures, but through the path of market-based practices leading to innovation, productivity, and competitiveness that automatically allow mer­it to flourish rather than nepotism. We all know that Joseph Sti­glitz has been associated for a long time with China’s market-based policymaking initiatives and that he essentially coached the Chi­nese to grow through competitive means and not coercive. Once, in turn, the wealth is created, then ensure that it is equitably spread to avoid the 1 percent trap the West today finds itself in.

China thereafter has emerged as a unique new model of gov­ernance that amalgamates capitalism with social responsibility and work discipline necessary to gain operational efficiencies. The underlying argument is that unless something is created, there is nothing to equitably distribute! I remember back in my university days, Dr Vroom always stressed to explain how his mentor Dr Deming used to emphasise to the post World War II Japanese firms how they first need to focus on production per se to only then go on to talk about the quality of the produce. Also, ministership is about vision and leading from the front and not about spreading fear, despair, and panic. Earlier, when he was in the hot seat, instead of providing the much-needed leadership by comforting the flood affected making them feel safe and giving them a ray of hope that they are in good hands whereby the government will leave no stone unturned in help­ing them, he broke down narrating unnecessary personal sto­ries and giving needless explanations on how his government has no money in the kitty to help them! Public Administration Course 101: A) Governments should never be made to look broke & B) Even if the fiscal space is not there, the real chal­lenge is to find innovative ways to garner resources through market-based endeavours and by tapping diplomatic means rather than further troubling the troubled.

Not that it matters now, still trust someone should tell him all this and also to our political party leaderships, because the dam­age these self-converted socialists cause—even if in the position briefly—can take years to reverse. We had another one of these self-converted socialists in the early days of the PTI government whose rather delusional tenure was thankfully quickly wound up. Anyway, the Mr Sensitive has left a legacy of unproductive and perhaps even unethical legislative decisions that not only under­mine investment and wealth creation in Pakistan but also dis­courage savings, tax unrealised incomes, and unfairly unleash the revenue collector on honest taxpayers like never before; the only example on such measures that one can recalls, dates back to Hit­ler’s targeted taxation policy in the late 1930s when preparing to take down the world by first taking down its people.

While Islamabad may not realise this now, these draconian pol­icies, if left for long, carry the potential to erode legitimate eco­nomic activity in Pakistan, which could take decades to restore. The repercussions tend to be serious in nature as Pakistan has a history of holding on to poor policymaking far too longer than advisable; perhaps this nature of the State comes from its colo­nial background. What Pakistan needs today is to shore up its competitiveness and to provide an environment for its entre­preneurs that encourages productivity and innovation. We keep on giving examples of India and Bangladesh on how they have turned around their economic fortunes, but what we fail to ap­preciate is that they have done so by carefully nurturing their re­spective private sectors: freely allowing them global connectivity; by ensuring the availability of affordable capital to them; by pro­moting operational economies of scale; by strictly managing na­tional external accounts through aggressive import substitution and in balancing sectoral FDI related outflows; and perhaps most importantly, through a conscious state’s decision to cede more space to the private sector where it can ensure more efficient de­ployment of the same capital—bigger bang for the buck!

Dr Kamal Monnoo
The writer is an entrepreneur and economic analyst.
Email:
kamal.monnoo
@gmail.com