Pakistan’s mishandled economy

The ruling junta in Pakistan is aware of this fact that economic restructure of the society also redistributes the power structure. But, fear of losing power makes them abstinent to bring change.

By Asmat Ullah
Pakistan has been wallowing in the deep mire of poverty since its inception in 1947. There hasn’t been any significant change in the lives of a large number of its people. Even today, according to a report by Ministry of Planning and Development, approximately 29.5% of the population is below the poverty line. On the other hand, many nations— China and South East Asian countries—who had the same economic condition few decades ago, have made giant strides in their economic condition. Their upward economic trajectory lends credence to the fact that their economic policies have been crafted with wit, talent and are exemplary for the poor countries. It also establishes the truth that right economic policies can push any nation towards economic progression.
The question arises why Pakistan has not been among such countries who made rapid economic growth. And what went wrong during the past decades since independence. The answer to these questions lies in many facts. Primarily, Pakistan’s economic policies ignored the significance of education and its role in the development and growth. It is a crystal clear fact that no country, in this era of technology and scientific innovation, can make progress without investing in its people. Many countries like Japan, Malaysia, and Indonesia, invested huge sums of their budgets in their Human Capitals. Eventually, this paid them off. Japan’s skilled labour is her richest resource. However, Pakistan paints a different picture in the field of education. Unfortunately, education has not been among the top priorities of the country. If we hopscotch through history, it appears that hardly any government in Pakistan has allocated more than 2 percent of the budget. Only in the era of military dictator General Pervaiz Musharraf around 2.6 percent of the budget was allocated to the education sector.
On the other hand, according to United Nations Development Programme, countries like Malaysia, Brazil, and Turkey allocated 5.1%, 5.9%, and 4.6% of their GDPs in 2012-14, respectively. These countries have probably lesser natural resources than Pakistan, but they hit the mark. Japan and Malaysia are among the top exporters of hi-tech products across the globe. Malaysia’s exports in 2015 were $175.7 billion (The World Fact-book) as compared to $22.00 billion Pakistan’s exports in 2017 (SBP). It is pertinent to note that electronic products have major share in Malaysia’ exports. This huge surge in hi-tech products is the consequence of investment in education in the past decades.
In addition, Pakistan’s lackluster economic performance is also caused by the defocus on those areas which have potential to grow substantially. For example, an investment in the education sector, agriculture and tourism can multiply the investment. These areas have the capacity to grow myriad times. Pakistan is an agrarian economy and employs 45% of the country’s total labour (Ministry of Finance). But, unfortunately, Pakistan lags far behind in agriculture sector as compared to the neighbouring India, China and United States. Lack of incentives to a huge number of farmers has barred the innovation and novelty in agriculture. The abstinence to build water reservoirs to store flood water adds on to the agriculture problems. In short, this sector that can be the most promising for the economy has been neglected by the governments.
Likewise, Pakistan has a great potential for tourism. Natural beauty of Pakistan’s northern area—Gilgit, Kashmir— is not less than the most beautiful areas of the world. But again, hardly any government has paid heed to focus on tourism. There is a poor road network that leads to these glamorous areas. Coming to the point, an investment in these areas can grow many times as compared to the investment in dead projects like metros and motorways. Investment on such projects does not generates revenue for the country and creates a vicious cycle of poverty. Even if such projects generate revenue that cannot be compared with the areas—agriculture, tourism, education— in which Pakistan has a natural capacity to grow.
Furthermore, government pays handsome subsidies on metro bus fares; instead of revenue generation it adds on burden on the economy. Hence, history of Pakistan’s foreign debt, categorically, illustrates that the debt amount has been increasing time to time. The reason for this burgeoning debt is that foreign debt is spent on dead projects like metros and orange trains which have no capacity to create revenue.
Are policy makers unaware of the importance of education, agriculture and tourism? Certainly not. History illustrates the story that how Industrial Revolution in England empowered the people from lower strata. Empowerment of this large number of people ended the decades old rule of aristocracy. The ruling junta in Pakistan is aware of this fact that economic restructure of the society also redistributes the power structure. Fear of losing power make them abstinent to bring change in the lives of people. Because educated populace would keep the dynastic politics at bay.
In this light, there should be no surprise that economy of Pakistan has been shrinking over the time and debt burden has augmented because economic policies and investment preferences have not been crafted wisely. If Pakistan really needs economic progress, then the public money should be spent wisely. Sectors like education, agriculture, and tourism should be focused to increase revenue generation to better off the lives of poverty stricken Pakistanis.
Asmat Ullah holds a master degree in Pakistan Studies from Quaid-i-Azam University Islamabad.

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