Elitist economy

LAHORE: Successive governments in Pakistan have failed to tame the country’s entrenched elite. Pakistan with a population 240 million has since long been dominated by a tiny elite; comprising a few hundred extended families.

An elitist economy is characterised by significant wealth and power concentration in the hands of a small privileged group or elite, while the majority of the population faces economic hardships and limited opportunities.

There is a substantial gap between the earnings and assets of the wealthy elite of Pakistan and the rest of the population. This gap is prevalent both in the public and private sector. The ruling elite, top bureaucrats enjoy living standards that lower cadre workers and employees cannot even dream of.

Majority of the population lacks the ability to move up the socioeconomic ladder due to elitist restriction, making it difficult for those born into lower-income families to improve their economic situation.

Elite groups have better access to quality education and job opportunities, leading to a perpetuation of privilege across generations. The children of lower middle class get education in lower standard private schools and the children of poor in substandard government schools and colleges. Naturally a well-qualified elite child would top the merit list.

The elite also wield significant influence over the political system, resulting in policies that favour their interests over those of the general population. Elitists may have preferential access to essential resources like healthcare, housing, and legal representation.

Palatial houses in posh societies of Pakistan are served household help at extremely low cost by the human resource that live not far away in slums.

The elite dominate key sectors of the economy, limiting competition and perpetuating their dominance. There is a ban on establishing sugar mills and the 79 millers exploit the consumers at will. Production capacity of the cement sector has increased 6 times to around 60 million tonnes, but the number of units remains stationary at 23-24 units. Failure to enforce antitrust laws to promote fair competition in the market failed to prevent monopolistic practices that contribute to elite control over industries.

Eliminating elite culture and creating a more equitable economy is a complex task that involves various strategies and systemic changes. One is progressive taxation.

Policies that impose higher tax rates on the wealthy can help redistribute wealth and reduce income inequality. This stands true for societies where the economy is fully documented.

In Pakistan, elitists live outside the tax net. The top agriculturists, smugglers, top stock market players and property tycoons along with those that under-file production or import prices easily escape progressive taxation.

Elite capture is so strong that the government lacks resources to establish robust social safety net programmes such as unemployment benefits, affordable healthcare, and housing assistance that can alleviate economic hardships for disadvantaged communities.

To placate the poor, it doles out petty amounts to the poorest under the Benazir Income Support Programme. The yearly amount provided to these poor families is much less than even the minimum monthly wage notified by the state

Investing in education and providing equal opportunities for all, regardless of socioeconomic background, can break the cycle of poverty and increase social mobility. Limiting the influence of money in politics and ensuring transparency in political donations can help reduce the disproportionate power of the elite over the political system. Instead, we have increased the campaign amount.

Encouraging diverse representation in all spheres of society, including businesses and politics, can lead to more inclusive decision-making processes.

Investing in infrastructure, healthcare, and education can stimulate economic growth and create opportunities for a broader segment of the population. Unfortunately we lack resources for development.

Our planners must realise that eliminating elite culture and creating a more equitable economy is a long-term and multifaceted endeavour that requires cooperation among various stakeholders, including governments, businesses, civil society, and citizens.