Wanted: fearless & creative economists

To be penniless is one thing, to be penniless and unoriginal, entirely another. Having been bled for every last dollar, the Pakistani state is embarrassing itself as it is wont to do. If Pakistan was an American politician, it would be Sarah Palin: shrill, sharp-witted, lacking substance, never ready for a real fight, but always pretending to be. Its hard to decide what's worse, the fact that Pakistan is in begging mode, or the fact that it can't decide whom it should beg, and for what.

No matter the indecision, ultimately the qibla for Pakistani leadership--legitimate, or illegitimatd--always seems to be outside the country; Riyadh, Washington DC, Abu Dhabi, London, or Beijing. Pakistan is running out of capitals in which it can showcase its ineffectiveness. Perhaps the next big treat for the international press corps will be high level trips to Dhaka and Kabul, the veritable pieces of bread in the South Asian beef-veggie sandwich that is always cause for just a teeny bit of indigestion.

Whatever would a high level Pakistani trip do in Dhaka or Kabul? The same thing they do in any other capital. Try to bully a stronger country, one with a clear and discernable raison d'etre, into giving Pakistan, a country without any of the above, the one thing it always seems to need more of: money. Given the deluded alternate universe inhabited by most Pakistanis, the idea that Bangladesh or Afghanistan is stronger than Pakistan may be outright blasphemous. Perhaps, its time Pakistanis learnt to be a little more tolerant of reality. Who can remember the last time a Bangladeshi leader went on an unending quest to beg or bully countries into handing over cash? And in Afghanistan, the idea of speaking Dari or Pashto isn't dealt with in the same scandalously spiteful manner in which speaking Urdu, or Punjabi, or Sindhi, or Balochi, or Seraiki is here in the Islamic Republic.

On the topic of learning, Pakistani Citibankers (all of whom it seems, will eventually become de facto finance ministers) should quickly learn that not all nation states are awash in self-conscious pity or self-loathing rage (practitioners of both faux sentiments know exactly who they are). It is in fact ok for countries to sometimes have original ideas that are fundamentally about serving the people of that country. This is important because eventually, someday, a Pakistani minister of finance will have to actually stand up and say, "Enough! We don't need the IMF to tell us we need to control spending; we need to control spending because we're spending too much!" She will say, "We need to stop taxing the middle class, and start taxinf the rich". She will say, "The easiest way to fix the balance of payment situation is to punish the consumption of high-end luxury goods and services that Pakistan sells rupees to buy". She will say, "The state needs to discern between taxing income, and taxing wealth, and we need to tax wealth". Most important, perhaps of all, she will say, "I don't care whether you fire me or not, Mr. President, Mr. Prime Minister, and Mr. Ambassador. I don't care. I will speak truth, because I took an oath as a public servant to serve the public interest. Besides, I could never win an election anyway, and all the money I've made from banking will keep me and my children well fed for the rest of time".

Pakistan is being beaten mercilessly in foreign policy boardrooms on Pennsylvania Avenue, K Street, Madison Avenue, Downing Street and Palace Street. It is being beaten unrepentantly in the voting booth by the absence and apathy of the English-speaking, urban and expatriate minority. It is being beaten with its own music, and someone else's cinematography and screenplays in and around Connaught Circle, be it Veer Zara on the silver screen, or the Adventures of Hanuman on the idiot box. It is being beaten in the caves of Tora Bora, and the mountains of Swat by cavemen from all over the world, but with ideas born in its own seminaries.

Given the obvious limitations to outdoing its own inadequacies, it is staggering that Pakistan is once again, preparing to go back to the IMF. This is not the same IMF that Pakistan left in 2004. Back then, if you disagreed with the IMF, you had to be a pinko-liberal, tree-hugging, bleeding-heart, wannabe-Guevara. Today, not even die-hard supply-side mullahs would argue in favor of the IMF as a route to eventual economic prosperity. Pakistan's impending reentry into the IMF program is astounding, given how widely discredited the IMF is across the globe today. To understand how Pakistan keeps finding its way into the IMF's lap, one needs to understand who "Pakistan" is, when we speak of economics, and public finance.

First, Pakistan has very few real economists, but it has dozens of senior bankers and retired international bureaucrats. Second, Pakistani bankers are not thinkers, they are doers, and Pakistani international bureaucrats fear authority, not voters. Finally, the country has no history of credible academic institutions at which economics is taught.

Three of Pakistan's biggest public finance economics problems are: a fiscal burden on the middle rather than the upper class; a balance of payments burden on the state, rather than the consumer, and; borrowing to finance spending, rather than cutting down spending. All of this is compounded by a lack of confidence, which causes capital flight. Foreign investments leaves for other countries' environments and domestic savings leave for other countries' dollar accounts.

Bankers are not trained to over-think issues. They are trained to deliver in the short term. Shaukat Tareen is an exceptional banker, and he will probably stave off default, and mobilize some kind of a deal from either the Arabs, or the IMF. He will not, and cannot however deliver an altered playing field for the Pakistani citizen.

Retired international bureaucrats from the IMF or World Bank are not trained to challenge authority, in fact, they are trained to obey it. This means that even with the exceptional intellect that most retired international bureaucrats possess, thinking outside the box is a near impossibility.

The only place where one could expect to find technically competent economists, who are not scared of speaking the truth, who are happy to challenge other people's ideas, and who are capable of thinking outside the box is at universities. Unfortunately, the story here is even more depressing. My own alma mater, LUMS, began a Bachelor's program in economics in 1997. Widely hailed as a world class economics program, the first economists' batch of LUMS students were taught microeconomics by an IMF employee, development economics by a World Bank employee, and agricultural and environmental economics by a Bible-thumping evangelical American, who was, bless his heart, from a state near where Sarah Palin comes from. In short, young Pakistani economists are the products of a very specific kind of economics. At the Applied Economic Research Center in Karachi, or the Economics Department at Quaid-e-Azam University things are not nearly as didactic, but even there, by no means is Pakistan producing a steady stream of future Sens and Bhagwatis.

Pakistan is now completely mired in an economic and national security mess. This means that incumbency is poison. The only possible good that can come of the current mess is a sense of history and lessons for future governments. Pakistan can ill-afford the habitual sullying of good people, with a combination of bad economics and even worse institutional incentives. Economists must be free from fear, from pension considerations, and from ideas they've derived from books written by other people for other circumstances. Young non-partisan Pakistani economists like Mushtaq Khan, Ali Cheema and Asad Sayeed are assets that need to be protected from the vagaries of the state, and the impulses of patronage politics. They need to be given the freedom to speak loudly, and be encouraged to be creative. In the long run, as one creative and quite competent economist once said, we are all dead, anyway. So we may as well live with fearless creativity.



The writer is an independent political economist. He can be reached via the website,