2022: Unshackling Pakistan’s economy

As Pakistan enters its seventy-fifth year of independence, a conventional policy is unlikely to combat the breadth of its economic challenges. Across a range of areas—human capital, technology, agriculture, finance, trade, public service delivery and more—new ideas must (innovation) now be on the table. The Covid-19 pandemic has not only cost Pakistan many lives and livelihoods, it has also exposed major structural weaknesses in the economy.
A huge agriculture and employment crisis, rising and massive inequalities, tepid investment growth, chronic banking sector challenges and unprecedented Pak Rupee devaluations have plagued the economy, exacerbated by the Covid-19 pandemic.
It has 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; Bangladesh in this respect would be a good role model to follow where the state has tangibly demonstrated on how ‘responsible’ outsourcing to the private sector on key deliverables can not only take away from the burden of the state, but also impart them in a much more efficient and quality-oriented manner.
Climate change is no longer a distant threat, while disruptive technology has huge implications for Pakistan’s demographic dividend—already by now a significantly reduced annual snowfall level in the Himalayas is raising alarm bells. In addition, the dangerous lurch towards growing intolerance and public anger and frustration will cast its shadow on Pakistan’s pursuit of prosperity for all.
While persistent inflation could be a contributing factor in the general national unease, the Sialkot incident involving the Sri Lankan operations manager tends to be a litmus test for the State to re-establish its firm writ over some right-wing elements spiralling out of control. So in essence, unshackling Pakistan would largely depend on the key question: Can Pakistan use the next twenty-five years, when it will reach the hundredth year of independence, to restructure not only its economy but rejuvenate its democratic energy and unshackle its potential—to become a genuinely developed economy by 2047?
For this to happen, the institutions that rule, the political apparatus, the establishment, the political diaspora, the bureaucracy and the judiciary, will need to jointly re-think the national vision, which fosters a prosperous and inclusive economy. They will jointly have to set their minds to new development priorities, acknowledge the hard truths, and lay out the clear choices and new ideas that Pakistan must adopt towards the goal of inclusive development and international acceptability.
So, what does Pakistan really deserve? With half the Quaid’s vision already lost, will we keep on muddling through the current course or do we somewhere possess the inherent resolve to course correct and try and make Pakistan the state that its founding leader had envisioned? This is what will define the next 25 years and whether or not we can restore sanity to pick-up ourselves and bring in the right leaders or continue on the path of self-interest and placing concentrated wealth over larger national interest.
Global economic development over the last 100 years teaches us an important lesson—through examples of the European Union, China, the Asian Tiger economies and the others—on how progress must be an amalgamation of economic growth and social prosperity, since neither can occur in isolation. We will have to address the question of how Pakistan can use the next twenty-five years, up to the centennial year of independence, to restructure not only its economy but rejuvenate its democratic energy and unshackle its potential to become a genuinely developed economy by 2047.
Unshackling Pakistan would require an unshakeable and sustainable focus on key ideas such as restricting the state’s role to the universal provision of fundamental necessities, affirmative action to enjoy the advantages of a strong female workforce, as well as measures that ensure the demographic dividend is harvested.
To be able to clearly understand and comprehend and without resorting to typical economic jargon about why Pakistan’s economy in the 60s’, lauded as one of the most dynamic in the world, is now ailing, and what it will take to fix it, the answers lie in some sweeping agendas of reforms in order to reinvigorate growth and share the benefits more equitably, or in other words to make the country both more prosperous and happier.
There is this rather urgent and pressing case for Pakistan’s policymakers to fully and frontally confront long ignored realities about the Pakistani economy—its fragility, structural inequality and the low levels of state capacity which have been made especially visible in the ravages of COVID-19; the urgency to now finally place a much-needed spotlight on challenging the current economic status-quo and to offer important and even provocative policy prescriptions.
If Pakistan is to come out of its current and ongoing economic impasse, engaging with these provocations will be in finding the way back to sustainable growth and development. Meaning, unleashing wide-ranging second-generation reforms in the Pakistani economy with the sole purpose of reaching its full potential and delivering greater prosperity for its 230 million citizens by honestly grappling with the real concerns on gender, climate, health, education, state capacity and other challenges that remain unaddressed simply because the state never had the requisite resources and the capacity to look into them.
If Pakistan has to truly progress, then the urgency of the present moment, in the wake of Covid-19, has to be grasped in a revolutionary way against a backdrop of worsening global climate, and at a time when a manufacturing-led pathway to prosperity can no longer be taken for granted.
Unless we create a happier, more inclusive and prosperous society by the hundredth anniversary of independence and that too with a very specific roadmap to attain it, things will disintegrate very quickly leading to a situation that may render itself uncontrollable. The idea therefore should be to bring out the new possibilities of high-quality growth by successfully managing today’s global concerns; climate change, greener operations, money laundering and responsible financing and to undertake bold structural reforms that aim to displace the present obsolete policy thinking and lay a strong emphasis on the urgency of mobilising the latent economic growth potential of our women with the needed policy measures for their empowerment.
The kind of needed reforms being referred to are going to be both painful and painless. Pakistan should set aside its partisan divides and heed their wise advice. In essence, the key would be to look outwards and to start locking into the US$80 trillion world market. If Indians can compete successfully in global markets, so can we Pakistanis and if we bravely jump into global markets, Pakistan’s economy could explode. Seize the moment. Yes, we can!

The writer is an entrepreneur and economic analyst. He can be contacted at kamal.monnoo@gmail.com

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