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October 3, 2016

From warfare to welfare


October 3, 2016

In the aftermath of World War II, the global political and economic landscape turned on its head. Empires disintegrated, millions of people perished and cities were left annihilated.

At the end of it, both victors and losers were smarting from the ravages and miseries inflicted by the war. With a demoralised public and a large portion of able-bodied workforce swallowed by war, what they faced was a humongous task of resurrecting and repairing all that was lost in the madness of the moment.

In Western Europe, that resolve culminated in the formation of a remarkably successful political and economic union, while in Asia, Japan emerged from the ashes of Hiroshima and Nagasaki to lead the way for South Korea, Taiwan and Singapore as one of the most spectacular examples of welfare statehood in recent history.

One comes across loads of post-war literature dedicated to the question of why or how some countries managed to grow faster than others. Yet, one defining attribute of the majority of countries that climbed the ladder of development has been a categorical break with their belligerent world outlook.

The focus shifted from building armies to an ambitious project of nation-building through trade and artful diplomacy. Strict austerity was institutionalised with saving rates approaching up to 40 percent of GDP. Non-development expenditure, such as defence and public administration, was drastically cut by diverting resources to revenue-generating public enterprises and investment in human capital. Export promotion was subsidised and luxury imports were heavily taxed.

On top of it all, national anti-corruption campaigns were launched, and cases of misappropriation and tax evasion were severely dealt with. The result of that unflinching focus from warfare to welfare is an enviable success story that today decorates the pages of economics textbooks around the world.

In stark contrast to European economic consolidation and the East Asian ‘Growth Miracle’, the post-colonial development experience of South Asia has failed to inspire any genuine hope of economic turnaround. The region is host to about 50 percent of global poverty with an unforgivably low per capita income of only 1,496 dollars a year.

To summarise the plight in one shot, two of the continent’s largest economies – India (130th) and Pakistan (147th) languish at the bottom of human development index out of 188 countries vying for a respectable place in the community of nations.

Given the pessimism evoked by such statistics of deprivation, the two contentious neighbours were not destined to go down this path. At the very outset, following their first scuffle in 1948, the needs of society were subordinated to the needs of a soldier. From the standpoint of Pakistan, the perceived existential threat from a hostile neighbour hatching conspiracies on the other side of the border consumed the imagination of policymakers in the formative years after independence.

This obsession with security at the expense of everything else laid the foundation of a security-state whose most prized possession remains its atomic bomb. Setting up the enterprise of Afghan jihad and the ruinous consequences of that fateful era continue to haunt the prospects of long-term stability in the region.

Almost 70 years on, both states vehemently refuse to learn from their follies of the past. If anything, they are all set to repeat them. Only this time it sounds ridiculously dangerous.

It is about time the two countries took a good hard look in the mirror and cobbled up a common front to address the abject destitution of their increasingly intolerant masses. The menace of poverty and extremism devours societies from within. It cannot be kept out by piling up stocks of missiles, gunships and F-16s or waging wars.

Only the power of sound reason and the promise of a quality life can neutralise it. May good sense prevail.        

The writer is a postgrad student of economics at the University of Bonn.

Email: asadullahkhan628



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