Pakistani economy needs radical reforms to end the crisis

Existing economic model is working only for elite

On Monday-two different seminars in Pakistan discussed the economic crisis and the solutions. It was like one tale of two different events organised in Lahore and Islamabad. There were three common things in both the seminars.

 One-the economic experts painted a bleak picture of the economy. They are not optimistic about the economic turnaround in near future. Two- Economic experts stressed the need to undertake radical reforms in the economy. The crisis like situation will persist without initiating the fundamental changes in the structure of the economy. The experts agreed that Pakistani economy is captured by elite and it’s only working for the interests of the elite and ruling classes.

The seminar in Lahore was organised by PPP Central Punjab on ‘Current Economic Crisis and its Solutions’-which was presided by PPP chairman Bilawal Bhutto and leading Pakistani economists expressed their thoughts and ideas about the current crisis and its solutions. LLeading economists Shahid Hafiz Kardar, Dr. Kaiser Bengali, Dr Hafiz Pasha and Qaes Aslam also painted a bleak picture of the economy.

Ch. Manzoor and Qamar Zaman Kaira played leading role to organise the seminar. This seminar is a beginning of a national debate and dialogue on the economy. PPP must continue to organise such events to discuss the economic problems and solutions. 

     

PPP chairman Bilawal Bhutto spoke well on social democracy-democratic socialism and current crisis. Bilawal Bhutto also lamented the PTI government for implementing anti-people economic policies. He also spoke about the common man’s economy and conditions of working and poor people. He said that “How can those (who are) unaware of the ground realities find solution to the prevailing economic problems here.

 He further said a common man’s economy had been compromised with because of the ‘incompetence’ of the government. He lamented that the PTI government had made the economy worse in the last 16 months. You can ask common man, vendors, farmers or workers how they are living and barely surviving.”

Dr. Kaiser Bengali defended the nationalisation policy of ZA Bhutto government in 1970s. He stressed the need to abandon the neoliberal economic policies and to bring back the role of the state in the national development and economy. He stressed to build the social democratic model of the economy.

Dr. Kaiser Bengali also called for banning all unnecessary imports. He also suggested cutting down non-development expenditures by limiting the size of bureaucracy and also reducing non-combat expenses out of defence budget.

Sustainable Development Policy Institute (SDPI) organised a lecture in Islamabad on “Economy and national security: Political economy choices for reform”. Professor Adeel Malik, a Globe Fellow on economies of Muslim societies and an associate professor at the Department of International Development of Oxford University delivered the lecture on the problems of Pakistani economy said that the popular discourse on the economy in Pakistan lacks an associative debate on political economy. Both are fundamentally connected with politics and geopolitics of the country.

The elite dominate the economy and state structure. The elite have captured almost every sector of the national economy that enjoys even greater control over domestic power politics and economic policies. The rent-seeking economic governance model which serves the vested interests of elite and handful of rich has become unsustainable for national growth.

Professor Adeel Malik added that Pakistan’s economy is facing fiscal Ponzi scheme challenge which is posing serious threats to the poor, future generations and productive sector of the economy.

He said that data for the past three decades shows that Pakistan’s economic growth has remained volatile and mainly spurred by consumption rather than through investments and exports. As a result, banking, services and real estate comprise the major engines of growth.

“This present economic order is unsustainable which, if it continues, may consequently have negative implications in the form of growing inequality and violence,” said Prof Malik.

The problem with the Pakistani elite is that it is not interested in reforms. It is also not listening to the sane voices. The elite are still implementing the IMF imposed economic model of growth and development. The neoliberal model of IMF has failed to solve the economic problems of Pakistani economy.

The experience of last four decades shows that IMF solutions and description to the ills of Pakistani economy hasn’t really worked. This model has failed to address the poverty-unemployment and sustain economic growth and development.

Pakistan needs new pro-people model of economy and policies which works for the masses. A people’s charter of economy and democratisation of economic structure is the need of the hour. Pakistan needs a national dialogue on economy involving all the stake holders. Without serious and meaningful reforms-we will continue to face crisis like situation most of the time.

                                                          Khalid Bhatti