EDITORIAL: Nobody, at least in Pakistan, is surprised that a report by the International Finance Corporation (IFC) and the World Bank (WB) has identified “entrenched special interest groups” in the country, which thrive on the status quo and deliberately implement and maintain “unfair and distortive economic policies”, and also make it very difficult to undertake any sort of reforms. The report, called the Pakistan Country Private Sector Diagnostic (CPSD), also goes on to note that the country has “tremendous untapped economic potential” which, if realised through appropriate policy actions, can “help create new market opportunities, mobilise private investment to create new jobs”, and all that.
That amounts to saying of course that things would have been fine had it not been for the elite, which includes “the public administration, the military complex, industrial conglomerates, religious groups, large landowners, and others”, because they make sure that whatever laws are framed by the state cater above all to the industrial barons and feudal lords that rule this country. After them come the civil bureaucracy and other “interest groups” that are either part of the essential government machinery or have enough nuisance value to give everybody a headache if their interests are not accommodated. It’s very easy to see how that makes something like reforms very difficult because it is the very people who control government policy whose influence needs to be checked, reduced, and punished where necessary. And surely they can’t be expected to green light a process that is principally meant to cut them down to size.
The big problem with all this is that while the IFC and WB have stumbled upon these issues in their research, we have been suffering from them for a very long time, and even though everybody knows more or less what needs to be done nobody is able to so much as lift a finger to do it. Therefore, we remain a country where feudal lords decide agriculture policy, industrial moguls influence subsidy and tax decisions, the middle class is always either crowded out of the lending regime or overburdened with taxes and tariffs, and whatever businesses the state runs are the definition of corruption and inefficiency besides milking the exchequer to the tune of hundreds of billions every year instead of adding to it. That leaves precious little space, in the ruling elite’s priority list and hence its budgetary considerations, for all the problems of the middle and lower income groups that form the largest part of our already very large population.
The report also makes the kind of sensible recommendations that everybody is already very well aware of, like putting a lid on the losses of State-Owned Enterprises (SOEs) by containing their debt and closing non-essential, unviable and defunct outfits while divesting assets when possible. It doesn’t, however, say anything about dealing with the on-ground spillover of such steps, like interest groups bulldozing them before they even take root, fierce political resistance which also happens to be completely legal, opposition spin and a political storm resulting from the downsizing, and also all the tricks that trade unions have up their sleeves to disrupt all such things.
Pakistan Tehreek-e-Insaf (PTI) made a big fuss about precisely these things since well before its ascent to power. Yet even it has been completely helpless in getting the ball rolling on any sort of reforms, especially in the bureaucracy. And it is something of a cruel irony that PTI too found out, like all the others, that it just isn’t possible to come to power in this Islamic republic without first riding on the shoulders of exactly the same feudal and industrial chieftains whose entrenchment at the top is so antithetical to the essence of representative government. And so we go round in circles and the fate of the two million or so young people that hit the job market every year rests largely in the hands of a group whose larger interests would be hurt by trading those people’s degrees and diplomas for jobs that will enable them to ultimately lift the system and smash the status quo.
This is hardly the first report of its kind and, to be fair, there is hardly anybody in the whole country who is not aware of these problems and also what needs to be done about them. The matter, ultimately, is one of political will. Clearly, it is too much to hope for a self-realisation on the part of said special interest groups that by hurting the system any further they will also kill the goose whose golden eggs they have monopolised since forever. So a cleansing will somehow have to be forced upon them. And the way things are going, it doesn’t seem to be expected anytime soon.
Copyright Business Recorder, 2021