As Pakistan now moves into its seventy seventh year of independence, conventional policy is unlikely to combat the breadth of its economic challenges. Today in the modern day economic management climate some of the key economic questions that we clearly need to ask are that, should the state’s footprint in Pakistan needs to be big or small? Is our future growth to be manufacturing-led or services driven? If both, then for exactly how long can we afford to let industrialisation slip? Will any efforts to re-industrialise be market driven or continue to be marred in corruption & rent seeking? Will Pakistan produce for the export markets or merely be focused on the home market? Will we keep on allowing the bleeding of our external account by continuing to welcome (on any terms) foreign direct investment that later becomes a permanent source of foreign currency outflows through profit repatriation, royalties, technical fees, etc? Do Pakistan’s young today prefer government jobs to private sector employment? Only honest answers to these questions can forge a targeted strategy towards economic resurrection or for that matter to come to any sustainable agreements on the much touted Charter of Economy. If we are to indeed move forward, then the elementary lesson that our economic performance numbers over the last 77 years teach us is that the current preferred status quo needs changing. Importantly, Changing the role of the state; Re-building the foundations by this time with due focus on developing human capital; Freeing markets, albeit with prudence on external account management; Unleashing competitiveness; Re-engineering the economic mix by essentially arresting de-industrialisation; and finally to start planning for the future and not just short-term survival initiatives to give Pakistanis - and not just a few select quarters - the economy they truly deserve. The key message is that the state today is too large relative to the size of the country and in the process not only has it ended up spreading itself thin by taking up too many things to do, but also has crowded out the private sector, in-turn leading to inefficient deployment cum usage of the total quantum of capital available in country. Naturally, the state or the public sector lacks capacity to undertake operations that rightfully should be with the private sector, so Pakistanis end up with poor economic governance and compromised delivery of essential services - There seems to be no reason for running public companies that typically should only be in the private sector, except to ironically provide employment to a small number of people and to be able to provide managerial positions to political or members of the powerful national institutions. In fact, largely we are where we are today as it is simply the cost Pakistan is paying for making poor policy choices. The real trouble is that at present one has no real grounds to be optimistic either, because the reforms that have been talked about regularly for years remain elusive and it is noteworthy that no meaningful reforms have been undertaken since 1985; ones that could be game changers or could truly turn Pakistan into a genuinely developed economy by 2027, hundred years of independence.
Something that also carries long-tern negative implications, as a recent job market survey by Mercer indicated that majority of the Pakistani youngsters still want governmental jobs, meaning they rather associate with a skewed work:remuneration equation rather than seeking their future in upward mobility through hard work and optimised returns - often a usual development trap in countries where literacy and ethics are lower on an average scale! And this causes an ever bigger challenge, since it invariably leads to a typical syndrome where the default response for Pakistanis in every situation is to look to its government for everything. And this sadly further empowers the inefficient and corrupt ruling elite, as this helps draw more and more power cum tainted legitimacy from this unhealthy dependency, be they be the bureaucrats, the powerful institutions or the perpetually empowered political mafia. Finally, it is important that across a range of areas—human capital, technology, agriculture, finance, trade, public-service delivery and more—new ideas must now be brought on the table. The COVID-19 pandemic and now the Ukraine and Gulf Wars have not only cost Pakistan many lives and livelihoods, they have also exposed major structural weaknesses in the economy. A historic farm and jobs crisis, rising and massive inequalities, tepid investment growth and chronic banking-sector challenges have plagued the economy for many years. The recent events have exacerbated these challenges. They have also exposed the limitations of the Pakistani state, which tries to control too much—and ends up stifling the economy and the inherent energies of its young population. Climate change is no longer a distant threat, while disruptive technology has huge implications on the economy in many ways. In addition, an emerging yet overriding concern does not overtly relate to the economy at all. In essence it stems from the fear of currently a dangerous yet growing lurch towards a totalitarian system, which if not checked, is bound to cast its shadow on Pakistan’s pursuit of prosperity for all stakeholders. As Pakistan moves closer to its hundredth year of independence, a sort of new fear or a new concern today lurks in the minds of its intelligentsia, one that does not see a challenge not merely limited to restructuring its economy, but also to somehow ensuring that its retains its very soul of independence, something that in-turn hinges on its ability and resolve to rejuvenate its diminishing democratic energies!