Elite bargains hurting Pakistan: UK expert

ISLAMABAD: Pakistan is passing through elite bargains to keep the status quo among all the powerful belonging to politics, business, military, civil servants, intellectuals and journalists, and a dominant group emerges to get control.

These views were expressed by Stefan Dercon, Professor of Economic Policy, at the Oxford University on Friday. In a breakfast discussion with journalists, he said that only those countries had made progress on the development front that achieved a GDP per capita growth rate of over 4pc per annum. He cited examples and said that Ghana, Ethiopia, Indonesia, Bangladesh, India, and China had annual increases in income in the range of 4.2pc to 12.7pc. “But Pakistan and Nigeria had a GDP per capita growth rate of up to 2.6% from 1990 to 2021. Pakistan was like Ghana in 1990 but now is falling behind India and Bangladesh,” he added.

Dercon said, “There are governance, political and even corruption issues in these countries too but they still managed to grow. Economic policies are driven by a quest to keep power as part of a clientelism patronage-based state.” Pakistan’s elites, he said, have remained focused on the status quo and bargained for a clientelism patronage state. “The status quo is untenable and hurts Pakistan and even the elite are losing now,” said the former DFID official. “There is a need for a common ground for continuity of growth and development,” he stressed.

Dercon argued that the low tax collection is part of the elite bargain equilibrium, so are the high subsidies, low savings and investments. A poor business environment is meant to avoid foreign direct investment.

Later, Dercon, along with British High Commissioner in Pakistan Ms Jane Marriott, called on Minister for Finance, Revenue and Economic Affairs Dr. Shamshad Akhtar at the Finance Division.

According to an official announcement, the finance minister shared policy actions to enhance Pakistan’s economic resilience in the face of global challenges, with focus on sustainable development and inclusive growth. Dercon affirmed continued commitment to support Pakistan’s economic development and applauded the country’s efforts in actively pursuing reform agenda to enhance economic stability.

Jane Marriott commended the longstanding relationship between the United Kingdom and Pakistan and pledged to explore avenues for increased economic cooperation and investment between the two countries.