Political stability

Political stability in China pulled out 850 million Chinese out of poverty where the percentage of Chinese living in extreme poverty fell from 88 percent to 1.85 percent. Political stability in Singapore transformed one of the poorest countries in the world in the 1960s to the world’s most competitive economy (in the latest edition of the IMD World Competitiveness Ranking). Political stability in Malaysia has taken the per capita income from a meagre $234 in 1960 to $11,414.

Political instability in Pakistan has indebted Pakistan to the tune of 107 percent of its GDP. Political instability in Pakistan has thrown 40 percent of Pakistan’s population into poverty. Political instability in Pakistan has forced 71 percent of Balochistan and 49 percent of Khyber Pakhtunkhwa to live in multidimensional poverty. Imagine: the rate of poverty in Qila Abdullah, Harnai and Barkhan (all in Balochistan) is more than 90 percent of the population.

The IMF, in a study titled ‘How does political instability affect economic growth?’, collected data from 169 countries from 1960 to 2002. The IMF study has three conclusions. One, higher degrees of political instability are associated with lower growth rates of GDP per capita. Two, political instability adversely affects growth by lowering the rates of productivity growth. Three, political instability adversely affects growth by lowering the rates of human capital accumulation.

Another research undertaking, titled ‘The impact of political instability on economic growth: the case of Guyana’, has two very interesting conclusions. One, politically induced strikes have a negative impact on economic growth. Two, terrorism is “not significantly related to growth in real GDP because of the dispersed nature of economic activities and their negligible effect on production and productivity.”

Pakistan is caught in a vicious cycle where an unstable political environment results in uncertainty. In turn, this uncertainty reduces business investment. In turn, lower levels of business investment result in poor economic performance. In turn, poor economic performance generates public unrest – and leads to government collapse. We need to put an end to this vicious cycle.

Ali Mehmood, in a very well researched book ‘Enter the dragon’, raises two extremely important questions. One, has the Western style of democracy made countries rich? Two, is the Western style of democracy a solution to poverty?

Have a look at today’s Pakistan. PM Imran Khan is dying to kill the entire opposition so that he is the only choice left. Asif Ali Zardari, the former president, is dying to capture the prime minister’s office for his son Bilawal Bhutto Zardari via his pro-establishment Machiavellian undertakings. Nawaz Sharif, our three-time prime minister, is dying to fabricate country-wide chaos to force new elections that he thinks PML-N would win. Nothing in it for the 220 million.

What we have is ‘procedural democracy’. What we are destined to have, as a consequence, is political instability – and little or no economic growth. What we need is ‘substantive democracy’ that benefits the 53 million who voted in 2018 as opposed to the 1,192 who got elected. What we have is ‘democracy-in-reverse’ where the elected extract all the benefits and the voters are worse off after the elections-than before the elections. As long as we have ‘democracy-in-reverse’ we’ll have political instability – and little or no economic growth.

The writer is a columnist based in Islamabad.

Email: farrukh15@hotmail.com Twitter: @saleemfarrukh