This article is part of a series titled “Is there a way forward for Pakistan?” Read more about the series here.
Pakistan, much like the rest of the world, suffered from significant economic shocks last year. Inflationary pressures fueled by a post-COVID and wartime world economy revealed the vast structural deficiencies that have been plaguing the country for years. Political instability and weak governance has prevented the establishment of concrete, necessary economic and social reforms. Today, Pakistan is faced with a severely declining reserve of foreign currency and the depreciation of the rupee – it is hurtling towards bankruptcy.
These are difficult circumstances for Pakistan, as they are for the world. In the face of such severe shocks, Pakistan needs to strengthen its resilience as a state. Such a path, however, does not rely solely on economic policymaking, but deeper strategies to augment its political and social composition. To this end, we would like to share our own experiences in navigating this way forward, in Bangladesh. We now firmly believe that the way forward is the way inward – that the nurturing of any state must start from within, through inclusive politics.
How does one work towards inclusive politics? From our experiences in the Youth Policy Forum, we have learned three pivotal lessons which we would like to share here. First, in the South Asian context, the concept of a development bargain must not only be acknowledged but leveraged; second, youth participation in policymaking is pivotal to reintroduce dynamism in the process of reforms; and finally, any economic transformation must be accompanied by a powerful, all-inclusive coalition of stakeholders working together. We firmly believe that these strategies can and should be replicated in Pakistan, where they have the potential to transform the foundations of Pakistani economics, politics, and society for the betterment of all Pakistanis.
Crafting Successful Development Bargains: Civil Society and Private Sector in Bangladesh
The World Development Report in 2017 had signaled a new approach to understanding the trajectory of economic development in countries, by paying particular focus on the political elite. Indeed, this was particularly relevant in the South Asian context, where political, economic and military elites have played a domineering role in public policy over the last few decades. Consequently, economic transformations hinge on the consent and agreement of ruling elites. This has been defined as the elite bargain, defined as the agreement between elites to ensure power sharing and resource allocation. This concept led to what Dr. Stefan Dercon introduced as the development bargain – where elites shift their priorities from solely protecting their interests to also ensuring positive development futures for their state.
Bangladesh is a textbook example of a development bargain: despite facing significant political instability over the past few decades, its elite have largely upheld the primacy of goals such as economic development and stability. This is, of course, not without cause: the economic growth of Bangladesh is critical to provide the rents the state relies on to preserve itself. However, it has also created favorable circumstances for non-state actors, granting them essential freedoms to operate successfully.
The best example of these are non-governmental organizations (NGOs), which play a significant role in development. The government, acknowledging its own capacity limitations, opened up several spaces of public service (ranging from healthcare to education) for the participation of NGOs such as BRAC and Grameen Bank. These NGOs have worked to actively fill gaps in public service delivery, and have not been obstructed by the government in such endeavors. This contrasts with a case where a government is unwilling to concede its responsibilities to third parties, and at the same time fails to produce the necessary public services its citizens demand.
Similar can be said of the private sector, particularly the garments sector, which overcame the foundations of political patronage in the economy by assuming political roles themselves. This enabled the safeguarding of their industry and the adoption of largely pro-business policies that would ensure the growth of economy and industry in Bangladesh. In Pakistan, the dominance of military elite in economic growth and development is well established and has crowded out the possible role that the civil society can play in development. Much like the case of Bangladesh, there is a need to open up space for the private sector and civil society to play a broader role in development, and more importantly, to fill in crucial public service and economic growth gaps.
Reinvigorating Reforms: Youth as Drivers for Policymaking
There is a surprising dilemma in the history of politics in Bangladesh: countless movements in our proud history over the past half-century have been driven by young people, and yet, today, the average age of our parliament is 59.48 years – well above the global average of 53 years. The reintegration of youth in policymaking has been a prime goal for us at Youth Policy Forum, and it has led to an unprecedented dynamism in the field of policy change for the country.
The foundation for youth participation in policymaking is a basic one: young people have the greatest interest in the incoming future, of which they are central participants. Their perspective is thus critical to ensure the longevity and robustness of public policy. At the same time, they are able to bring in innovation and newfound evidence into the policymaking process. The process of engaging youth in policy, however, is a long one: it involves educating young people, nudging them towards research, and finally encouraging the transformation of their research into tangible advocacy.
Our experiences in Youth Policy Forum have led us to understand that policy education must be completely accessible – thus, it must not only be free of charge, but also in local languages. This enables mass learning, and more importantly, allows for greater understanding of nuances in policy making among general citizenry. These adaptations must not come at the expense of quality: countries such as Bangladesh and Pakistan now sport numerous academics who would be able to adapt their lessons for the young freely and easily, and their skills must be leveraged for policy education.
Not only does policy education enhance the knowledge of audiences, but it paves the way for creation of further knowledge, by granting audiences the skills to pursue policy research and analysis. Young people can leverage digital tools for researching issues they are interested in, and can apply policy methodologies in such endeavors. These efforts, however, must also be accompanied by the presence of a strong, expansive network of other young people to advance policy dialogue and collaboration.
Youth Policy Forum started as a Facebook group for young people to discuss policy together. It is this basis – as a network of young people – that has enabled it to connect young, brilliant Bangladeshis from around the world with stakeholders across the board. Now, young people are able to present their policy insights to actors such as political leaders, civil servants and other key stakeholders, all while being guided by renowned experts. This is an unprecedented policy process, entirely established by and for the interests and competencies of the youth.
Removing the Barriers of Entry in Policy – the Case of Privilege Resistance
It is now evident that South Asian countries have fallen behind East Asian counterparts in terms of economic development. While countries like Japan, South Korea, Singapore, Malaysia diversified their economy and upgraded to high value manufacturing and services, success of countries like Pakistan, Bangladesh, and India has been modest. Recently, Vietnam, Philippines have also upgraded their economy to a large extent. The divergence is vast and dramatic: the value added productivity of the average Pakistani worker in the past three decades has seen a 40% increase; a figure which pales in comparison to the average Vietnamese worker, whose productivity has increased by 328%.
In Pakistan, the dominance of military elite in economic growth and development is well established and has crowded out the possible role that the civil society can play in development.
It is important to understand how East Asia made this transition and why South Asia failed. Work by Alice Amsden on South Korea, Robert Wade on Japan, and Joe Studwell on the region as a whole10 point to the state facilitating learning and productivity of the private sector firms with a strong export performance. Even in Pakistan, firms that systematically export their goods are 26% more productive than those that do so passively; but even such firms are still 21% more productive than those that do not export. East Asian states have made economic upgrading a policy priority across their government, while efforts in South Asia have been dismal. Bangladesh, India, Pakistan all have a lot to learn from the East Asian experience. One lesson to learn is this: for social upgrading, we need economic upgrading, and for economic upgrading we need rapid learning both by the firms, and by the policymakers. This learning cannot happen if the state keeps the private sector closed to a favored few cronies, if the state focuses on preserving rents of its closed allies and keeps subsidizing the losers. Take for example the case of trade in Pakistan: work by Malik and Duncan have demonstrated how politically connected industries (in contrast to politically unorganized industries) have successfully lobbied for higher anti-tariff policies in line with their interests, but harmful towards long term upgrading goals. The role of the state would be to unleash the entrepreneurial spirit of its population, pave the way for learning and innovation, eventually resulting in improved productivity and better living conditions. Pakistan must take a leap out of the book of successful East Asian economies and promote competition and learning, with better investment climate, quality investment on human capital, and reduction of wasteful spending. The first step in this would be to take stock of its potential economic sector which has potential to upgrade, and then have critical conversations on what is stopping upgrading or who is blocking upgrading. The civil society as mentioned above needs to play a critical role in this but eventually it is the powerful business and government elites who have to undertake the painful reforms. They must understand Pakistan cannot continue like this and they have to generate new and productive rents in new sectors. Protecting existing rents for the cronies and vested elites would only strain the already fragile social contract in Pakistan, the time for reform, time for economic upgrading is now. And it would require a coalition among the business, government, and civil society who believe in the true potential of the country and its people.
Conclusion
The economic onslaught of the past few years have revealed the decrepit underbelly of the Pakistani economy and the urgent need for action. It reveals that the wider society has become more important than ever in steering the economy side by side with the state towards a more prosperous and resilient future.
This is a journey that must be made concertedly: the state must prepare to open up avenues for civil society to participate in policymaking, and it must prepare the economy for a transformational period of upgrading. At the same time, the civil society must prepare itself to take responsibility for newfound competencies it will share with the state. In Pakistan, words such as policy engagement and economic upgrading can no longer be relegated to ivory towers; they must be opened up for the people. These efforts will set Pakistan on a prosperous path, as had been longed by its people for so many years.
The writers are researchers from Bangladesh. Md Abir Hasan Niloy is the co-founder of Youth Policy Forum and a DPhil student at Department of
International Development of the University of Oxford.
Zaheer Abbas is the Head of Reform Management in Youth Policy Forum, and a sophomore at the
Dual BA Program between SciencesPo Paris and Columbia University
