A tryst with economic truth?

Probably the greatest wrong that the Musharraf government gave to Pakistan was the perpetual lies that his PM and his economic team foisted on to the country. Old habits die hard and the continuation of those lies is now a way of life with the public functionaries. The other day, it was mentioned that functionaries belonging to a real estate company were caught with fictitious land documents.
The owner is way up with every political party that is in power. The expense that comes with it is so huge that the country will reel under it. It happened in the US and in the EU zone countries. Once that bubble bursts, the end will be significantly different. Pakistan is already reeling under huge deficits not of finance but of every damn thing under the sun. The distribution network has been undone by the price increase and there is now no way that the country can undo what has happened as a result of the inconsequential postings that have been given.
There are all kinds of rumours as to how top postings are provided for money consideration. Naturally those that come in after paying huge sums for the 'appointment(s)' will then charge huge amounts for considerations. As a result, things that are expensive, naturally because of supply shortages is one thing, but what about the things that are expensive because of artificial means - legislation, regulation or and foul play.
The time has come to examine the transaction costs and how they have escalated. There is no point in teaching economics that is not relevant to the work at hand and the various ratios that the WB/IMF keeps on quantifying are meaningless; the tax-to-GDP ratio and what not. Lesser minds keep on mentioning these in all kinds of TV shows and since the watcher is a helpless audience, the matter is perpetuated by these hapless persons. The dictionary meanings of these words have changed as well as the definitions.
The WB/IMF brought in Ogra, Pemra and what have you. These became the places for jobs for favourites. These were actually instruments of oppression. The Musharraf government used it for arm-twisting and its threatening attitude towards the institutions that were supposed to work for the free market system. So, instead of having people of eminence in these organisations, favourites were launched.
Economically we need to differentiate between hidden parallels and the natural resources, like fields and or busy locations and the corporate sector. The greatest assets that this country had (past tense) were the farmers that converted manure and seed into grain. That was before the advent of the chemical fertilizer. Before the advent of a different kind of colonialism, the natural way to productive efficiency has since been forgotten and a different set of clever ploys has been used to create a mafia that serves its own purpose.
Perpetuating copied intellectual oppression one can still turn rent into exorbitant profits and that is what the companies and the MCs are doing. The economic scenario is exceedingly greed-oriented and with foul policies that self-perpetuate. Social corporate responsibility is a far cry. These economic producers are anything but economical.
Pakistan's competitive edge has been eroded by the inefficiencies that have been perpetuated by an inefficient human resource and a corrupt leadership-style in which a corrupt distributed leadership plays a humongous part. The distributed leadership is part of the new management style where the lower functionaries are allowed to work independently, but within a certain sphere of work rules and regulations. These rules and regulations are kept up-to-date by the political leadership. Where the political leadership is found inept and wanting in discretion and the rule of law, these and other national matters and issues cannot be resolved.
The malaise that has hit Pakistan is based on the capitalistic model that has been distorted. The rent and returns from agricultural land is fixed or changes with little effect on year-to-year changes in the price structure as well as the returns that the farmer or the owner is likely to receive. The risks that the farmer has remain and can be seen in the recent debacle of the crops in the flood zones. The industrial sector is largely unknown in terms of flood losses and their crib is always the same. How to make more profits or greed profits and how to siphon off resources from the government? There is in that sense no real private sector. So far as competition is concerned, it is alright if it is in another sector, but they are unaffected.
The agriculture rents are more or less based on the productivity of the agriculture lands. In industry on the other hand profits are also determined by alternatives. An industrial unit or a service sector with stiff competition will be less profitable than a sector where there are incompetent rivals. There is a time-scale in both areas that have not been adequately explained. In the industrial sector the grey areas between efficiency and valued services is pretty thin.
The sector of industry that is linked with the agriculture sector is not fairly organised and there is concentration of industry where either there are two or three total industrial units serving a large demand or where the ban on imports is carried out in the interest of the baby industry concept. The baby industries have now outlived that kind of protection that was unfairly provided to them at the expense of farmers.
The most unkind cut is where the industrial units have a monopoly and are supposed to be serving the agricultural sector. The two industries that can be highlighted for this are the fertilizer and the tractor industry. Recently, the tractor industry was appealing to the government for more benefits after decades of monopoly power in which there was 50% concentration.
The inept sector was carried out by various inept governments. Now after years of greed profits and self-serving financial outlays in which they siphoned off resources to their own ends and gave 14 bonuses to their workforce and then took without prejudice to their salaries, more bonuses for themselves. The fertilizer industry that has relished subsidies is no better, in fact much worse. They were allowed to go untrammeled in the price structure.
Unfair regulation and government imports of fertilisers and the elimination of the distribution system only helped in taking more profits. The WB/IMF, the harbingers of the free markets, were the first ones to sanctify these high profits because this tied in with the corporate hiatus of the West - make the commodities so expensive that they cannot get into competition with them. Comparative advantage, already a nebulous concept, was further destroyed by the intentional behaviour of the international agencies. Ricardo must be turning in his grave.
The case of the poultry industry is also an interesting one, where unfair prices have benefited the few that were there in the early stages of the industry development and who were helped generously by the state financial institutions, through soft loans and industrial safeguard regulations.
These five entrepreneurs hold four monopolies and can manipulate the price structure any time that they want. This was known as the widows industry for the widows were able to make do by small-scale poultry. All this was dismantled by the greed of the few. The rules that were brought in disrupted the widows and the day-old chicks produced by the industry enabled them to kill any localised competition.
How does one fulfil one's economic tryst with the nation in terms of truthful assertions? Difficult for one has only indicated some aspects of that tryst. There is so much more to economics than what is being taught and what is being practiced. I have yet to see any economist worth the name go and see for himself and come to grips with the problems. Those that are in ivory towers have distorted the economics for the worst, so far as the poor are concerned.