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Money Matters

Changing the national model

By Majyd Aziz
13 January, 2025

Any country that goes through the ordeal of political instability, political point scoring, and political character assassination, loses its bearings and the ensuing result is that economy, businesses, and democracy become hostage to these political machinations. Pakistan is suffering from this triple whammy.

Changing the national model

Any country that goes through the ordeal of political instability, political point scoring, and political character assassination, loses its bearings and the ensuing result is that economy, businesses, and democracy become hostage to these political machinations. Pakistan is suffering from this triple whammy.

Changing the national model requires that the federal and provincial governments need to take certain pragmatic steps to ease economic pressure on households and businesses. It is incumbent upon the decision-makers to primarily address the needs and requirements of the populace.

Despite innumerable impacts on the nation, pro-poor policies and decisions must be designed and implemented. Social safety nets are welcome, but these seldom alleviate the difficulties of all people. The first immediate step is to rein in the wastage of financial resources on projects that are more publicity-centric for the government and rarely beneficial for citizens. Overemployment in the civil and armed bureaucracy and state-owned enterprises must immediately be rationalised.

The second step for both federal and provincial governments is to immediately remove all taxes, levies, duties, fees etc on the movement and sale of food, medicines, and other essentials. This step would enable goods to reach the consumer at much lower rates and prices.

The third step should be to channelise financial resources and physical infrastructure towards upscaling the three prominent sectors: agriculture, fisheries and mining. Efforts should be immediately made to increase efficiency, enhance productivity, and modernise the sectors.

Although corruption is a major factor due to which the country is also in a mess, it is apparent that no matter what initiatives and accountabilities are undertaken, this menace will not go away for a long, long time. However, expecting policymakers to realistically cope with frequent widespread economic crises is frankly pie in the sky. Moreover, politicians, as well as their sycophants and mouthpieces, must substantially cut down their itch to rah-rah in every situation. They are losing credibility.

Undoubtedly, businesses have suffered in more ways than one. The Covid-19 pandemic, the devaluation of the currency, the neglect of the economy, the dependence on borrowing, both external and internal, and the inability of most businessmen to change their cultural and traditional modes of entrepreneurship as well as explore new foreign markets have led to the turtle-speed growth of the private sector. Now is the time for governments and the private sector to change the business model.

Democracy is achieved through the real power of the people and that is still a way off and may not become a reality as long as elitists who have vested interests and access to the citadel of power are in dominance

The answer lies in industrialisation and that is possible with liberal financial credits, the removal of the shackles of red tape, and fast-track establishment of small, as well as large, industrial estates where land is affordable, and the focus should not only be export-oriented but also on import substitutions. These would create massive employment (especially accommodating the youth bulge), productive utilisation of finances, and more importantly revitalise the private sector.

Generally, the phrase ‘demographic dividend’ is highlighted and discussed, but the fact is that rarely any meaningful policies that factor in the inherent energies of the youth are proposed. Today's youth need to be cultured into an innovative digital environment that could bring about financial, social, and progressive change for them and the nation, instead of idling their productive years in social media activities. This is primarily due to a lack of technological development, skills upscaling, and employment opportunities.

It is time to revisit the prevailing system. First, Pakistan must get out of the decades-old time warp, and this can be done through structured land reforms, education reforms, and digitalisation of all sectors. Pakistan must take maximum advantage of natural resources and indigenous products, skills and processes to enhance the export regime as well as reduce dependence on unbridled imports.

Second, long-term policies are imperative instead of relying on ad-hoc measures and frequent changes or U-turns. Policies, projects, and decisions regarding the economy, foreign policy, health, education, etc, taken by one government are then either abandoned, disrupted, or amended by the next government. This attitude negatively impacts not only business plans or the feasibility of domestic investors but also discourages foreign investment. Policies should be in place for five or ten years as done in China to maintain continuity.

Third, policies should be all-inclusive for every citizen instead of formulating policies that favour rent-seekers and the elite. The fact is that focused support to state capture, crony capitalism, and cartels, not only affects the citizens but is the prime reason for corruption which is now rampant from top to bottom. Policies must be such that all citizens adopt these as their own for their benefit and the nation.

There still seems to be this Utopian notion that democracy is omnipresent in the country. The fact is that economic hardships have not led to the sustainability of democracy. Democracy is achieved through the real power of the people and that is still a way off and may not become a reality as long as elitists who have vested interests and access to the citadel of power are in dominance.

Pakistan has never been a true democratic state. Former president of the Philippines Gloria Macapagal Arroyo rightly said: “We have to be bold in our national ambitions. First, we must win the fight against poverty within the next decade. Second, we must improve moral standards in government and society to provide a strong foundation for good governance. Third, we must change the character of our politics to promote fertile ground for reforms.”


The writer is a former president of the Karachi Chamber of Commerce and Industry.