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Tuesday May 17, 2022

Elite capture

January 22, 2022

Pakistan is a country of almost 250 million people with diverse cultures, classes and groups. Today, it is facing the worst kind of discrimination – elite capture, which has negative effects on the overall fabric of society. The most important questions are: what is elite capture and what are its forms and manifestations in any society or culture? Is it different from elite culture? How does it affect and influence society and people at large?

Elite capture – which is a global problem – is a form of corruption whereby public resources are used for the benefit of a few individuals or groups – usually referred to as the elite class – at the cost of the welfare of the people of the country. A capitalist system is somehow responsible for this phenomenon. The relationship between capital and labour in the capitalist economic model is quite intriguing and interesting. Capital thrives and multiplies at the cost of large labour inputs as factors of production.

But this is another debate. Here, we are more concerned about the class that is superior in social status and which influences and decides public policies for the benefit of a few individuals using public funds for their interests. There is also a need to differentiate between the thin lines of discrimination – which is criminal – and elite capture – which is acceptable to some degree all over the world.

The capitalist system all over the world resembles racism and is based on centuries-old legacies of slavery and servitude. The same is true for the privatisation of state-owned enterprises (SOEs) in Pakistan and all over the world that has opened the doors for elite capture.

Crony capitalism played havoc with the economies of developing countries, especially the East Asian economies back in the 1990s – similar to the situation in Pakistan – in the name of deregulation, liberalisation and privatisation. In recent years, South Korean President Park Geun-hye and South African President Jacob Zuma politically suffered largely due to crony capitalism when they respectively favoured Samsung and an Indian business family. This shows that they used their political clout for furthering elite capture.

The global privatisation process has been biased as it created an elite class which captured national resources in the name of a ‘laissez-faire’ economy. Economic reforms – which gave birth to privatisation, invited investment from the private sector and attracted foreign direct investment (FDI) – were destined to create a new class of elite capture in Pakistan. The privatisation of state-owned entities and their handover to a few wealthy individuals is part of elite capture, which is happening at the direction of the World Bank and the International Monetary Fund (IMF).

But, unfortunately, socialism and its economic system were equally destructive. State resources were in the hands of a few individuals employed by the state, and they started exploiting their positions, resulting in elite capture. The system went into disarray and the state ultimately collapsed. So how can governments get the best of the systems for the ultimate benefit, welfare and interest of the people while simultaneously getting rid of elite capture?

Scholars Noam Chomsky and Marv Waterstone most exquisitely try to find any alternative, if any, to capitalism. The only available alternative is a hybrid Chinese economic system, which needs to be tested at the global level. But the fact is that it has taken the shape of the mix of private and state-owned entrepreneurship, working well for elite capture.

In the case of Pakistan, we observe that the civil services in Pakistan are a fine example of elite capture. The structure of the civil services is designed in such a way that it’s bound to promote an elite culture that is working with the country’s upper class. Such elite capture is almost touching the degree of discrimination, which is not only unethical and immoral but also criminal.

The feelings of the people about the delivery of the civil services are quite concerning. It would not be overemphasised to say that an apartheid-like situation is prevailing in inter- and intra-service group rivalries, which is detrimental to the very structure of the civil services as well as for the people. The much-needed civil service reforms could not be carried out despite discussions and deliberations at multiple forums.

The political elite has also become part of elite capture in Pakistan. The political parties and elected representatives have become a tool in the hands of a few pressure groups which are representative of elite culture, busy in creating elite capture and promoting elitism in society. These groups are usually fine-tuned to grab political power for their specific interests.

The system, unfortunately, supports such groups, as the political process has such dispensation that it is being utilised for the ultimate grab of political power in the form of government. To form a government is the ultimate mission and purpose of any political party deriving strength from such interest groups and lobbies. These groups are also common in strong political systems like one in the US and play a dominant role in the country’s political campaigns.

The challenges of elite capture can be addressed through reforms, especially political, social and economic reforms – by using technology and the media which can play an effective role in carrying out awareness campaigns, recognising elite culture or capture as a bad thing in society. Social media has an even larger role to play in this campaign, as it is available to almost all urban and rural households. Technology will keep everyone honest as far as elite capture is concerned. It can play a role either way, but it is generally considered that such a role will not be in favour of the few individuals or the class of people and will favour ordinary people. The media with the support of technological tools or gadgets can make this happen.

Reforms at all levels, especially political, social and economic reforms, can again play an effective role in addressing the phenomenon of elite capture. The local government system through decentralisation of power can effectively dissipate the negative effects of elite capture.

The same is the case of social and economic reforms, which can effectively address this issue of large discrimination in and among the various sections of society. Recently, the higher courts of Pakistan started playing an effective role in addressing elite capture in the larger interest of the country. This is a good omen. It gives hope to get rid of this in the long run to protect people’s interests.

The writer is an economist.

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