Making Pakistan’s Economy Work

By Dr. Ghulam M. Haniff

Two years after the military takeover Pakistan’s economy remains mired in a quagmire of decline. Thanks to ten years of gross mismanagement by the two democratically elected Prime Ministers, the prospects for recovery seem remote despite best efforts by the new administration. Musharraf, much to his credit, has made the rebuilding of the economy a high priority.

Any attempt in building its economy the nation’s major commitment should be in the direction of improving its agriculture and food production. Pakistan has been and continues to be a food-deficit nation. Shortages of basic staples are endemic with many people subsisting on less than half a stomach full a day.

An average Pakistani’s daily caloric intake is around 1,750 compared to 3,000 for a European and 3,400 for an American. That is barely enough to keep the body and soul together. Low caloric consumption accounts for low productivity, and diminished strength to ward off diseases. The result is a marginal life, actually mere survival through a life span of 58 years.

There is, of course, great disparity and wide variation in this regard within the country. Urban dwellers are much better off in contrast to the vast majority, over 70 percent, who live in the rural areas.

Producing enough to eat would mean modernizing the methods of cultivation. Pakistan’s agriculture is primitive, employing antiquated methods of production. Modern technology has to be learned and implemented for practical results. It needs to be accompanied with building an industrial infrastructure.

Emphasis on the implementation of technology in agriculture could unleash forces for the reform of the feudal system. Confrontation with feudalism, the curse of the nation, is inevitable. That is why the process of change has to begin in the countryside with food production as the goal.

Elections to local councils are a likely avenue for the dilution of the power of the lords. Any reform in the rural areas is doomed to failure unless the products of the farmers fetch a fair price in the marketplace. The answer to this problem is an open economy, unfettered by governmental controls, and based on market principles.

Since the countryside is a vast source of labor force the leadership should become committed to the creation of jobs. Pakistan’s rate of unemployment is so high, estimated to be over 30 percent, that millions are forced go abroad in search of work.

Apparently no one has figured out that these workers could remain at home and produce goods for exports. If entrepreneurs were given incentives the available labor could be used to create jobs and to build the economy. That is how countries have become developed and rich, most recently in East Asia.

In his eight years as the President, Bill Clinton created 22 million jobs while downsizing the federal government by almost a hundred thousand positions. The new jobs were exclusively in the private sector thanks to the forward-looking policies of his administration.

There is no evidence that either of the two democratically elected Prime Ministers of Pakistan created any jobs except for their families, friends and lackeys. These bloated the governmental bureaucracy at the taxpayers’ expense. In this regard the difference in the leadership of an enlightened nation and a backward one is quite striking.

People need to work for a living. Besides putting food on their table the activity of producing something tangible, or performing some service, is a contribution to the society, to the gross national product and to the general well being of the nation. It is how economic progress results.

No government can create an economy or run business enterprises successfully. Wherever these experiments have been tried, as in the Soviet Union, they have resulted in abject failure.

When people are left alone to pursue their self-interest production results to satisfy consumer wants. That system, called the market, has not really been given a chance in Pakistan. Prosperity and wealth are produced not by the government but by the people.

Being well off is not the exclusive preserve of the “gora” sahibs as some Pakistanis are inclined to think. In today’s world any nation can be prosperous and become developed provided correct policies are adopted and right methods are used.

In the words of one expert: “A nation’s wealth is now principally of its own collective choosing. It all depends on how a nation and its citizens choose to organize and manage the economy.” That choice has yet to be made in Pakistan.