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That the recent tomato crisis is an outcome of market failure and a flawed governance mindset which are keeping Pakistan’s sick economy from getting well has been discussed earlier in this space. But amongst other often ignored aspects of small or big crises is the absence of financial and economic literacy. (See BR Research’s Tomato crisis reflects market failure Nov 18, 2019, and Failed governance mindset, Dec 5, 2018)

There are many reasons why financial and economic literacy matter; both terms having different connotations. But before talking about the many specific benefits of rolling out country wide economic literacy programmes, let’s be mindful of the fact that the modern conception of humanity has been reduced mainly to an economic entity.

Whether one likes it or not, everyone and their aunties know that even the romanticised notion of ‘noble professions’ of teachers and doctors are also businesspeople; they are producers and suppliers of education and health services as are other economic agents such as the laundry man or the housemaid or the street vendors, and cart pushers.

Perhaps the most widely discussed benefit of financial literacy programmes is that it is an important demand-side initiative towards financial inclusion. Thankfully, Pakistan’s central bank understands this; it embarked on a five-year National Financial Literacy Program (NFLP) in the autumn of 2017.

But initial discussions with those in the industry reveal that the programme hasn’t really taken off; even NFLP’s main website (www.financialeducation.pk/) hasn’t been working for at least the last two days. Be that as it may, the good thing is that the country’s economic community at least appreciates one important benefit of having a financial literacy programme.

A less but increasingly appreciated benefit of having an economic literacy programme is the need to kick start entrepreneurship drive in the country. The developed world has already started cultivating entrepreneurial skills. As noted earlier, even primary school children in the developed west are being imparted basic concepts of financial literacy, flow of economy, an introduction to markets in the neighbourhood, while their family members are given workshops on why it is important to take risks. In Pakistan, only a few elite private sector schools are working towards these goals. (See BR Research’s Want entrepreneurship? Change mindset! Jun, 26, 2019)

But perhaps the most under appreciated yet no less important benefit of rolling out economic literacy programmes is the interplay of the following.

First, economic literacy programme can help towards better results of financial literacy programme. Finance compliments real economics, and in the absence of elementary economic literacy, there are limits to which financial literacy programs can achieve the desired fruits. Consumers’ willingness and ability to choose between various financial products cannot be divorced from broader aspects of demand and supply and input-costs or output prices.

Second, it can reduce information asymmetry and also help citizens in identification of economic opportunities regardless of the nature of business they are in, and thus help towards entrepreneurship drive. Third, it can help consumers know about their rights and responsibilities, and hence drive competition.

And lastly, it can help the state reduce the risks of instability and chaos caused by rioting citizens who often protest against rising prices without knowing that many a times the government, any government, can do little about it.

Think about it, how easy would it be for governments to regulate market if the citizens weren’t married to this defunct idea that government should regulate prices of milk and tomatoes to medicines. It is this very mindset that forces governments to take populist decisions, for the next election rather than the next generation, as a result of which crises of all shapes and sizes abound in almost every segment of this economy.

Unlike what many believe, basic economics is not hard to understand. Afterall, an unlettered female migrant worker from South Punjab working as a housemaid in Karachi’s DHA knows that she has to price her cleaning services higher for clients in the remote corners of Phase 8 (where transport is dearer) compared to Phase 5 or 6. Nor does the usually illiterate garbage man pick up garbage without Eidi; because implicitly he knows his work is in hot demand on Eid holidays.

Likewise, concepts of demand, supply, pricing, inputs, storage and handling come intuitively to the fruit seller and the milk seller alike. They need not have to have a post-graduate in economics. What is instead needed is to explain to them wider aspects of economy and finance works using examples from their own day to day life, work, and perhaps some common sense.

These programmes can take various shapes and forms - from localised, tailored videos, to summer schools or workshops of progressively increasing workload for those who are really interested. There should also be a programme called Teaching Economics as a Life Skill (TELS) ala the Teaching English as a Second Language being run in so many parts of the world.

TELS may be launched at primary school level with gradual increments in course load over the school life. Why must economics be taught – and that too often only as an optional subject – in grade 10 or 11, when in fact the economy in general, and markets in particular affect all and sundry, regardless of whether a child becomes an unlettered gardener, a bio-tech seed scientist, or a business manager/owner of that seed company. Yet, the irony is that this society and many others, teach geography from primary school (which is good no doubt) but doesn’t teach elementary economics.

Failing to launch TELS is akin to keep the society in the dark about what dictates their individual and collective lives, their choices and their consequences, even when they know nothing about their master.

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