Where Pakistan stands at 75


Thinking of independence on its 75th anniversary, without the start-up problems that Pakistan inherited due to a poorly planned and brutally executed – rather hasty – partition, will not do justice to the economic resilience that this fledgling country and its people demonstrated during its formation. years.

How far can this resilience take us in the foreseeable future? The answer to this question rests on certain factors found, or missing, around us. Although they overlap, I categorize these factors as ‘megatrends’ and ‘game changers’. The former are visibly and verifiably present in Pakistan today. The latter are natural or man-made circumstances that determine whether “megatrends” lead to positive changes or negative outcomes.

Megatrends can only be understood in historical context, so let’s quickly recap the political-economic history of Pakistan.

First, it would not be wrong to say that over the past 75 years, customized versions of different economic models – ranging from the regulated economy (1950s), industrialization and the green revolution (1960s), nationalization (1970s), Islamization (1980s), liberalization (1990s) and timid economic reforms (over the last two decades) – have been experimented in Pakistan in various forms of civilian, military and hybrid arrangements of governance.

Second, Pakistan’s economy has been chronically hostage to political instability. This political instability gave initial stability to the four military governments. However, as life would have it, our democratically elected leaders tended to turn into dictators, while “dictators” wanted to be seen as democrats. As a result, Pakistan could achieve neither a true democratic regime nor a true dictatorial regime. Consequently, successive governments have resorted to populist measures, sweeping the need for socio-economic reforms under the rug.

Third, two decades of easy inflow of foreign aid (dollars) for geostrategic reasons, under the regimes of General Ziaul Haq and General Pervez Musharraf, gave the mistaken impression that the economy could function indefinitely on growth driven consumption-based and import-based and could afford to ignore current account and fiscal deficits.

Fourth, despite a multiple increase in GDP and a sevenfold increase in population since 1947, Pakistan’s spending on education and health as a percentage of GDP has remained almost static (below 2% for education and below 1 .25% for health).

Therefore, although Pakistan has improved its performance in the United Nations Human Development Index (HDI), it is still 13% lower than South Asia’s average HDI (only better than Afghanistan ). Low spending on education has also resulted in a situation where, without upgrading of human resources that could meet the demands of the service sector, Pakistan has shifted from an agriculture-based to a resource-based economy. services. Agriculture absorbs twice as much labor (40%) as its contribution to GDP (20%). This mismatch translates into lower productivity and income inequality in our economy.

Let’s take a look at where Pakistan is today (the megatrends) given the historical context above. It is the fifth most populous country in the world, with a population of 224.78 million (Pakistan Economic Survey, 2021-22). In Pakistan, two out of five people are under the age of 15, while three out of ten are between 15 and 29 years old. Half of them are women who, despite structural exclusion, are increasingly making their mark and playing a vital role in Pakistan’s development. Most Pakistanis of working age migrate both within the country and to other parts of the world (the latter are an important source of valuable remittances).

Increased individual empowerment is the second megatrend in Pakistan. Our individuals are more self-sufficient today than they were decades ago. Despite the increase in economic inequality, the number of people living in abject poverty has decreased, the literacy rate has improved, as has life expectancy at birth. The internet, smartphones and social media have made information (and misinformation) much more accessible than we ever imagined. People are more aware of their rights and are empowered enough to challenge the status quo. They are outspoken in expressing their sociopolitical likes and dislikes. These trends remind us that one cannot ignore individual ownership while taking initiative regarding the future of Pakistan.

Increased individual empowerment, in turn, facilitates the decentralization of centers of power. Pakistan today has emerged from the risk of a coup. New centers of power: Parliament, the higher judiciary, corporate-owned media, more autonomous provinces, the business community and a vibrant civil society are vying for their place in decision-making. Their alignments (or misalignments) and alliances (or differences) will significantly determine the future of Pakistan.

Unprecedented consumerism is another megatrend in today’s Pakistan. One can think of any major international brand of consumer goods and it would be available in Pakistan. The cost of consumer goods is an important component of its import bill and adds to its trade deficit. Businesses are responding to the consumer culture and redefining the social fabric of Pakistan, at least in the urban centers.

Yet another megatrend is societal heterogeneity. Pakistani society is highly polarized and divided between all possible fissures and fault lines, political, economic, ethnic, sectarian, provincial, etc. The level of tolerance and mutual acceptance has dropped considerably today. A few groups claiming to be well-meaning resort to trolling, mob justice, mob lynching and revenge in various forms – street crime, honor killing, political differences or blasphemy.

On the natural resources front, water is becoming scarcer, while food and energy are becoming expensive. Managing water and food energy in the face of climate change has become a real challenge. Due to competing demands for water, at any given time, a considerable percentage of the Pakistani population suffers from food, water or energy insecurity.

All of the above affects Pakistan’s economy, reflecting a windfall and burst phenomenon where macro-economic stability and micro-economic relief have become paradoxes.

In no particular order, Pakistan’s position in the emerging geostrategic global order, which is shaped by the competing interests of the United States, Russia and China; switch to renewable energy; adaptation to climate change; the desire to improve the quality of economic growth by developing human resources and adapting new technologies; openness and transparency; and the politics of promoting societal tolerance are some of the game changers that can turn the megatrends mentioned above into a boon or a curse. These game changers set the economic, social, geopolitical and environmental paths for Pakistan’s foreseeable future.

It can be said that over the past 75 years, overall, Pakistan’s economic policies have produced many winners—poverty and illiteracy levels have fallen and health indicators are improving. Going forward, the opportunities presented by the emerging geostrategic world order, renewable energy sources and innovative technologies, if used transparently and wisely, can lead to sustainable and inclusive economic growth. This growth would help positively utilize the bulge of youth with more hands to win and fewer mouths to feed.

Now reverse the situation, and you will see how non-inclusive economic growth that benefits only the privileged would turn megatrends in the negative direction. It is important to note that the societal perception of exclusion and marginalization will bring impatience and restlessness not only among high-strung young people (under- or unemployed), but also in emerging centers of power. . Under such circumstances, these actors, instead of being part of the solution by providing political and intellectual leadership to pull the economy and the country out of troubled waters, would escalate the situation with half-baked ideas and less than practical demands. .

A non-performing economy would also directly affect the ability of the state to provide basic services such as health and education. This would not only further marginalize the excluded, but also pave the way for extremist groups to expand their influence through their humanitarian wings.

On its 75th anniversary of independence, the choice is ours, the citizens of Pakistan. We may not have control over megatrends, but we can certainly influence game changers in such a way that they affect those trends in a positive way and, if they don’t lead to an optimal scenario, can at least do better than the status quo. It is a common dream for many of us and a path to sustainable development for our future generations.

The author directs the Sustainable Development Policy Institute.

Twitter: @abidsuleri

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