I ask myself why so many of us write articles from time to time suggesting that Pakistan learn from other countries how they achieved their miraculous economic progress. China, South Korea, Malaysia and Singapore are the examples usually cited.
The most noteworthy is the oft repeated suggestion that we follow the China model. Implicit in these suggestions is a belief that there is something wrong with our economic policies, which is true but not the whole truth. And the suggestions that we follow the China model may be an answer but not the full answer.
There are nations that have had extraordinary accomplishments. And they have done so with exceptional hard work, often overcoming insurmountable obstacles and resistance to change, and drawing on their historical experience and national strengths to overcome any inherent weaknesses, while remaining steadfast in their commitment to change. This strategy was as instrumental to their unbelievable progress as their economic model. The two were organically linked.
Whether for economic development or for overall national progress, countries choose to have certain national purpose and broad principles or ideology. The specific economic policies they follow flow from these principles. That is why countries choose different paths to progress. No individual country’s situation is completely applicable to that of others.
All this is achieved with the help of an institutional framework built around a power structure that advanced ideology and broad economic security and strategic interests of the country, and elite interests (yes there are elites in every system – in some countries they largely pursue their own welfare to the sacrifice of public interest, like in Pakistan and many other developing countries, while in others they were committed more to public service than to their own interests).
A country like Pakistan which is stuck at a struggling economy, crushing debt burden, poor social sector, serious internal security challenges and serious power imbalances cannot wake up one day and say let us do what China did as if it is just a question of switching on to a new operating system. This would not work. You have to rebuild the machinery first, as the new operating system would not work on the old structure.
China can be an ideal but cannot be a model. Pakistan can, and should, be inspired by China. But there is so much gap between China’s achievements and Pakistan’s capability that emulating the China example would neither be practical nor relevant. We have to find our own way. But we can follow the general principle or paradigm of China’s rise. That is to focus on self-strengthening. And avoid an adventurous foreign policy specially one that comes at the cost of domestic order.
Pakistan often had the services of renowned economists and bankers as finance ministers who knew full well what good economic policies were. But why did they end up with bad polices? Simply because economy is not about economics alone. They did have good economic proposals but got a big push-back from the powerful ruling establishment and the special interests that supported it. The truth is there is a fundamental clash between policies that can foster positive change and the organising principles of the system running this country.
In Pakistan the system of elite capture gets respectability from the democratic facade but lacks legitimacy and moral purpose. It is a democracy in name, needed by the elite but unwanted by people. It is just a political tool for the dominant social groups to maintain their wealth and status.
The existing system allows for some marginal economic improvement and may continue to do so. Pakistan has seen brief periods of growth, often consumer-driven or limited to specific sectors, but these lacked sustainability due to the absence of fundamental reforms. Such growth was typically financed externally during periods of US engagement, not through domestic savings. As a result, it failed to generate lasting job creation, reduce poverty or improve social indicators. Instead, it encouraged dependency, living beyond our means and reinforced patterns of poor governance.
Yousaf Nazar in his erudite articles in these pages has articulated Pakistan’s foundational economic problems from time to time. In one of his articles he says, “Pakistan’s savings rate is strikingly and abysmally low compared to Bangladesh and India.…The root causes of Pakistan’s low investment and savings rates are deeply entrenched in structural issues, requiring significant political, economic, and social reforms on the one hand and making Pakistan an open and friendly country” for foreign investors, on the other.
The fundamental question is not what model will work for Pakistan but how to make it work – whatever model you choose, from East or West, or one from your own economists. The reality is that, whether it is China or other top economies, certain economic principles have been universalised regardless of the model or system. That the country should live within its own means, save and be productive and politically stable has become axiomatic. This is now almost a gospel truth that we see in the experience of many rising developing countries and aspiring middle powers.
Under the umbrella of these broad principles or objectives then you need to have detailed policies that fit the objectives. And for that a diversity of policy choices come into play. But that is further down the road. The first and foremost task is to lay the foundations for a normal or near normal economy.
That basically means the elite decision-makers need to have the political will to bring about change. Will they do it? And will the system allow them to go against the grain? That is the million dollar question. Once they decide to or are forced to change only then can one question whether to learn from China or any country. Some of the actions China took to overcome the obstacles and change the status quo might be relevant to Pakistan’s experience but only partially. We also might need to look at other countries’ experience. China is not going to give Pakistan political the will to change. Only Pakistan can do it. Only then can Pakistan fix its national priorities – and the solutions will suggest themselves.
The challenge is to mitigate and eventually remove the obstacles to development of which the most prominent are imbalances in the social structure, land distribution, civil military balance of power and security and development relationship. Not to mention the regional disparities, gender inequality, high population growth, poor showing in the human development index and exploitation of religion for political purposes. At the heart of all this is the huge imbalance between the elite privileges and the rights of the people.
There are powerful groups or institutions that have long dominated Pakistan’s body politic by taking advantage of its security issues, place of religion in its national makeup and feudal social structure. Overemphasis on security, the legitimacy and sincerity of security concerns notwithstanding, has skewed national priorities and resource allocation. And feudalism supported by religious institutions has created self-sustaining disparities in society by resisting education, women’s rights and socioeconomic emancipation.
Pakistan needs to have a balance between its development imperatives and security needs. It must invest in its people so that they can invest in the country in order that it serves them well. Equality of opportunity and recognition of merit are critical to achieving this mutually productive relationship and to society’s progress.
This isn’t rocket science; it’s a basic blueprint for progress in any system. The real challenge is implementation. We don’t need to look abroad; our country holds immense talent and deep insight into our problems. We already possess the resilience, critical mass and potential for change. The question is not what to do, but how to do it. It will take a generation, but we must begin.
The writer, a former ambassador, is adjunct professor at Georgetown University and visiting senior research fellow at the National University of Singapore.
