This article is part of a series titled “Is there a way forward for Pakistan?” Read more about the series here.
This short piece goes beyond the immediate multiple crises Pakistan faces on which others contributing to this series have offered thoughts and insight. Some may even be brave enough to present ideas and perspectives which are essential for Pakistan to exist at a level where a predominant majority of the population benefits from public and political action. Some will suggest how many of the chronic problems Pakistan faces today could be resolved.
Observers have been commenting on if/whether Pakistan were to default, what strategies would be required to continue functioning. (There are numerous templates and suggestions where one can look to find answers, although Pakistan’s specific economic configuration, size, location and relationship with many countries will always warrant somewhat different solutions.)
Some have also been asking if there is an alternative to the IMF, and issues related to dealing with International Financial Institutions. Another particularly topical theme on which many would give suggestions, relates to the need for ‘political unity’, or ‘consensus’, where the three or four main civilian political leaders would be advised to ‘sit and talk’ and come up with a strategy to ‘save’ Pakistan – with the military a possible arbitrator to such negotiations and talks. (The contradictions in such an endeavour ought to be obvious to anyone who sees which institutions are mentioned here, being the cause of the problems in the first place.) Issues related to macroeconomics, the Constitution, the ubiquitous climate crisis, and educational and legal reforms are also being discussed by analysts.
Reform and rethinking in all these and numerous other areas is essential, and the status quo cannot continue. For Pakistan to even exist with any prospects of hope and progress, it will have to offer very different possibilities. Avoiding mistakes of the past is important. Some areas which need to be on the agenda for discussion, and if possible, implementation, are presented here.
Neoliberalism’s failure
Perhaps neoliberal policies, backed by global capital, the IMF and the World Bank, work in some countries, where some level of economic growth and stabilisation may have taken place, albeit at huge environmental costs and with increase in inequality. This is a big ‘perhaps’. In fact, one can argue that many years after the failure of the worst kinds of capitalist exploitation under the name of neoliberal economics – the electorate – in many countries, has shunted out governments who supported and endorsed such policies. Latin America’s recent ‘Pink Tide’ offers numerous alternatives.
Moreover, the one-policy-fits-all fails, precisely because not all countries are alike. Pakistan is a good example of such failure, with after 22 IMF programmes, every government insists on starting a new one. This is a failure of every Pakistani government, of the IMF especially, and of neoliberal economics’ generalisations which are supposedly applicable to all, or most, countries.
While Pakistan cannot opt out of the globalised world capitalist system, it can adopt and promote numerous policies which focus on local needs and priorities more than those of global capital. Political leaders will need to take numerous hard decisions to make redistribution instead of accumulation the main pillar of economic policy. Key components for such an economic policy would need to include issues related to: taxation of all incomes regardless of source, taxation which is highly progressive and based on direct taxes rather than indirect taxes, doing away with most tax exemptions and benefits which favour only the elite and the private sector corporations, and similar issues.
A thorough review of expenditure and perks available to public sector employees and interests, including the military, is necessary. A wish list would allow for more spending on education, on promoting the right mix of economic incentives and opportunities, etc.
Income and wealth inequality, with extremes visible, has become a clear manifestation of every economic policy followed under the guise of neoliberalism in Pakistan. A recent UNDP Report found that ‘the richest 20 percent of Pakistanis hold 49.6 percent of the national income, compared with the poorest 20 percent, who hold just 7 percent’. At times of economic crises, as Pakistan faces currently and into the future, such inequality manifests itself in the worst form of discrimination. These policies must change. Trickle-down economics does not work. Land reforms – both urban and rural – better, focussed, distributive policies, all need to be implemented to include the poor and marginalised. All economic and social interventions have distributional consequences which affect different sections of society very differently.
Income and wealth inequality, with extremes visible, has become a clear manifestation of every economic policy followed under the guise of neoliberalism in Pakistan.
Whether a government goes to the IMF or doesn’t, the consequences fall differently on different sections of the population, the well-off, the middle class and the poor, very differently. Distributional consequences need to be factored into every decision taken.
Putting women first
In the literature on development economics and from history, numerous facts emerge repeatedly, which suggest some patterns and allow us to draw some clear conclusions and insights. One such finding is the need to put women first, in every public and private policy initiative. Without the participation, and in many cases, without the promotion and incorporation of women in every activity, countries will not progress. Women are central and foundational to the economic, social and cultural constituents of society and all things which exist subsequently. Every single policy in Pakistan must put women first. From literacy and education, to public safety and making transport available, to ensuring economic rights and opportunities, to providing equal inheritance rights, and rights to choose a spouse or the number of children they want. Such demands are a bare minimum for any collective measure required for the development of women, and ultimately for the progress of the country. At the minimum, equity and egalitarianism in every development and social project, needs to be gender-based. Our analysis of all economic and social issues needs to be based on a clear gendered perspective.
Educating women, giving them more jobs, creating a conducive environment which protects and allows them opportunity for education and financial resources will have huge knock-on effects on the economy and on society overall. From demographic consequences, to acquiring more rights and incomes, educating women will transform the social and economic structures of society and make Pakistan a far better place to be.
Neighbourly relations: An end to no-war, no-peace
Few countries progress or develop – however one wants to define either term – without engaging productively with their neighbours. The academic and anecdotal evidence and literature cites numerous economic and cultural evaluations which underlie this premise. Increasingly, countries are participating in and benefitting from regional trading blocs. South Asia remains the only major region, with as many as 1.5 billion people (twenty percent of the world’s population), which has little trade or economic engagement. The reason obviously is the relation between India and Pakistan.
Neither country is going to (physically or ideologically) move out of South Asia, although Pakistan has unsuccessfully tried for decades to do so. Both neighbours will have to come to terms with different religions, ideologies and political constituents and will have to accept each other’s domestic preferences and work around them. India is expected to be the fastest growing economy in 2023 and 2024, and in 2023, 15 percent of global growth will come from India.
Pakistan, at a time of extreme economic crisis, will be the biggest loser – having lost the opportunity to benefit from and participate in India’s economic boom. Pakistan’s leadership will cry hoarse over India’s internal politics, but this will not help Pakistan’s case. It will have to engage with its larger neighbour and accept that it is the junior partner, but a partner no less, and take South Asians forward. Egos and jingoistic sabre-rattling is not going to help Pakistan. There is an urgent need to rethink Pakistan’s India policy as this has far greater consequences than just possible economic benefits. The entire political economy of Pakistan will change if Pakistan and India can actively wage peace and engage in economic, social and cultural exchange.
Negotiating the military/negotiating with the military
Politicians are as much responsible for bringing the military into power in Pakistan, as the military’s own ambition and its greed and hubris. Pakistan continues to be dominated by the military because politicians have made it easier for the military to do so. Every opportunity that civilian politicians have created to enforce their writ on the political settlement, has been lost, as the military has re-established its writ and hegemony over civilian politicians, essentially due to some politicians (usually the opposition at any given time) reaching out to the military to favour it (the opposition) against the incumbent government.
As long as politicians and civilians believe that the military is their benefactor, it will continue to reign supreme. Pakistan’s military governments are a consequence of the failure of civilian politicians to be able to reach some form of understanding and equilibrium amongst themselves as to how to deal with the military, the so-called ‘establishment’. Individual civilians, in particular, have played a role in claiming ‘same-page-ness’ with the military, and have benefitted as well as suffered, by giving individuals in the military too much importance. While it is easier said than done, civilian politicians need to understand that the military is always a non-democratic force and needs to be kept away from politics. Only a consensus by civilian politicians can do this.
Moreover, it is important to realise that the question of the military’s budget as a share of the overall budget, is not of the consequence it once was, and today the dominance of the military in civilian and economic affairs, is much greater than what can merely be measured as a percentage of GDP. Agricultural land of many thousands of acres given by the government, or the many businesses of the military and real estate assets and connections, are far greater in value than its military budget. The absence (or inability) of civilian oversight and control, allows a severely warped playing field to exist, which hinders civilian enterprise – creating further privilege in favour of an institution which remains outside the control of civilians.
The aforementioned UNDP report shows that Pakistan’s military has ‘the largest conglomerate of business entities in Pakistan, besides being the country’s biggest urban real estate developer and manager, with wide-ranging involvement in the construction of public projects’. Pakistan’s politicians are responsible for this only as much as Pakistan’s military itself.
Conclusion
Neoliberalism’s failure in Pakistan is not simply a failure of the market or of capitalism, but also of those groups and parties which have constituted government and have held power over the last several decades – the elite in their political manifestations. Every political party as well as the military, is equally implicated in Pakistan’s acute failures and to expect the same groups of institutions or individuals to now do things differently, is irrational.
The existing political settlement has completely failed, and collapsed, and new political and class forces will have to capture political power to offer alternatives. An end to Pakistan’s political, social and economic problems can be achieved through different forms and manifestations of collective action since the existing political forces are unable and unwilling to bring about change even when the old order has unambiguously collapsed. This is a minimum requirement which underpins the possibility of meaningful and substantive change or A Way Forward for Pakistan. Otherwise, we repeat, we fail, we repeat again, and we fail better.
The writer is a political economist and currently heads the IBA, Karachi, a public sector University. These views are his own and do not represent those of the institution.
اگر اردو میں بھی لکھا کریں تو ہم جیسے بھی مستفیض ہو سکیں تجزیے تو سن لیتے ہیں
سکیں تجزیے تو سن ہی لیتے ہیں آپ کے اگر اردو میں بھی لکھا کریں تو ہم جیسے بھی مستفیض ہو