Pakistan, The New Bottom Billion?
- Plat-Forum's
- Apr 4, 2024
- 5 min read
Updated: Apr 6, 2024
Full Article
Preface
Pakistan has just been through its 24th Prime Minister election, resulting in PMLN’s Shahbaz Sharif taking on the office. A 76-year-old economy, struggling to find its way in this bittersweet world. It prone us to question what went wrong with Pakistan while its contemporaries are far ahead in this economic race. The idea came about while reading the excellent work of Paul Collier, “The Bottom Billion” and coming across various similarities between the countries in the Bottom and Pakistan. Hence, this article is merely an assessment of Pakistan’s economy and its resemblance to that of a bottom economy.
Current Economic State of Pakistan
Pakistan is faced with immense catastrophes hitting from every angle, be it political or economic. It has inflation beyond its control, never-ending poverty, undermining literacy rates, democratic infringements, and much more. All in all, Pakistan is under attack from all fronts. Revolution in Pakistan is not only in need of an economic policy, but one also must look beyond the world of economics and find assistance from the school of geopolitics and history to find out why we are unable to resolve the problems despite knowing where it has been hiding for the past 76 years. No individual wants Pakistan to suffer, it has had some very intellectual individuals and effective teams which have been able to disclose Pakistan’s economy much more succinctly. They all want Pakistan to become a better and more productive economy, rather it might be the dream of every individual to be the one who could change the course of Pakistan’s economy. However, the issue is not with finding the problem, rather it is the resistance that is required to solve these problems.
Pakistan towards the Bottom Billion?
Pakistan is no doubt on the road to an economic disaster unless an internal change comes up. It is a disgust that our country is being compared to the unfortunate ones rather than the growing economies. However, this is inevitable, as its characteristics are like that of a country at the bottom. This might sound overly pessimistic, but it is true, the economic traps Pakistan has frozen itself are destined to drag it to the bottom.
Aid the Problem
Lack of money is never the problem economists adhere to resolve. Give the poor some cash and all his problems will go away. This is an absurd and unsustainable ideology, quite like one that Pakistan has been following. Pakistan has been a member of the International Monetary Fund (IMF) loan since 1958, bounding itself by aid and loans that are now beyond its control for repayment. [1] It has sought help from the IMF every time a regime takes over. That has changed governments' incentives from having stable policies to just knocking on the IMF's door and getting a 3-year bail for their political tenure. Loans and aid have their diminishing returns, “A recent study by the Center for Global Development, a Washington think tank, came up with an estimate of diminishing returns implying that when aid reaches about 16 percent of GDP it more or less ceases to be effective”. (Collier, 2007) “In Pakistan, the debt-to-GDP ratio stood at approximately 75% in 2022, with external debt reaching $125.7 billion in March 2023.[2] Pakistan has forced itself into this trap, locking itself from all ends.
Democracy and Patronage Politics
Another issue is the characteristics of politics, Pakistani politics is indeed dominated by tribalistic and baradari features, where people of one clan often find themselves voting for the head of that clan. The Khans, Chaudhary, Rajas, and Memons have all been able to build small empires backed by economic and political leverages often bestowed upon them by the stronger political dynasties namely Bhutto’s, Sharif's, etc. Members of similar clans are often bound by their common political and economic interests which deprives them of the liberty to go against one. This also applies to the prominent workers of a political party, where even one prominent member might not be able to go against the political party due to his economic ties. Some go to the extent of having family ties within the political party, hence depriving them of liberty and freedom. It is absurd to even talk about democratic Pakistan with these empires still existing and getting stronger and stronger. This paves the way for patronage politics “where patronage politics is not feasible, the people attracted to politics are more likely to be interested in issues of public service provision. Of Course, for the societies where patronage is feasible, this works in reverse: democratic politics then tends to attract crooks rather than altruists.” (Collier, 2007) Hence these so-claimed civil servants are the ones least bothered to adhere to the problems of civilians, patronage paves the way for crooks and thieves to climb up while the ones who want to serve are forced way behind.
Military Issue
Lastly, comes the military dilemma. Pakistan has been a beneficiary of a direct military dictatorship for 34 years. Even after that, it has found itself difficult to break the indirect control of militarism. Military sustained control is due to their sustained economic control which inevitably brings political influence. “In countries that are richer than the bottom billion the risk of a coup is small, and if it increases a little, the military budget is not increased-indeed, if anything the military gets cut if it starts to be a nuisance. By contrast, in the countries of the bottom billion coup risk is generally much higher. The threat from the military is indeed probably the biggest risk of losing power that the most government face. And they pay up: more risk induces more money for the military.” (Collier, 2007) Part of this dilemma is the distrust amongst our so-called democratic political parties. Turkey is an example of a failed coup attempt where all the political parties came together and advocated against the coup despite their political grievances. However, in Pakistan the situation is reversed, political differences are turned into rivalries and political parties turn themselves to the military for assistance ultimately giving them the authority. Senator Mushahid Hussain quite openly expressed his view of the Former Army Chief Gen. Bajwa where the latter expressed that even if they wanted to alienate themselves from politics the distrust amongst the political parties causes them to inevitably crawl towards us for help. He stated that if all the parties got on together and wanted military disinvolvement, we would've been left with no option but to retreat. [3]
Conclusion
It's the bitter truth we must swallow, it isn’t to one's surprise that Pakistan ends up on the verge of bankruptcy now and then while having the characteristics of the bankrupt. One must understand that to go on the road of recovery the change has to come from within and from the bottom, starting from providing the basics, education, and health facilities. We need to understand that growth may not be a cure-all, but the lack of growth is for sure a kill-all.
References
Collier, Paul. (2007) The bottom billion why the poorest countries are failing and what can be done about it. Oxford ; Oxford University Press.
Cover page map [Ali, R., Khan, M.R. and Mehmood, H., 2017. Incidence of violence risk mapping using GIS: A case study of Pakistan. Journal of Geographic Information System, 9(6), pp.623-636.]
Notes
[1] See IMF’s website https://www.imf.org/external/np/fin/tad/extarr2.aspx?memberKey1=760&date1key=2020-02-29
[3] See The First Muslim Nation to Become a Nuclear Power ft. Mushahid Hussain | Junaid Akram Podcast #186 available at https://www.youtube.com/watch?v=l0w8KxmzgPg&t=1099s&ab_channel=JunaidAkram
Great Thoughts !