Land

Land, the immortal asset of nations; never in my wildest, did I ever imagine that land could be a liability.
Repeatedly, in fact very often nowadays, perhaps because of penning newspaper columns, I get quizzed about my views on key steps needed to turn the national economy around. Way back in October 2013, in response to a similar question I came up with an article titled "Three steps to growth" which was published in another newspaper on 20th October 2013. Today, for my money, my three steps still hold; putting things in perspective for today's write-up, even back then Land figured as step number two!
But, before we get to step two, a bit of showboating about how I had forewarned of the coming economic crunch: the First Step, according to that article of 2013, was to curb the trade deficit! "Pakistan has borrowed excessively to sustain a lifestyle that it could ill afford and the entire nation is responsible for this largesse... . The first step, therefore, is to review all imports of goods and services, with a view to intelligently curtail unnecessary consumption, by hook or by crook... . At the same time, focus on export substitution manufacture and, in the interim, ration domestic consumption of exportable items to provide a breathing space in the trade deficit...Consumer choice for the elitist cannot supersede the interests of the nation". I should get full marks for this forecast!
The second step, in that very article, was legislation to limit past, current and future Dewani court cases to a maximum of three years; and imagine the importance of this action for me because I had actually penned that costs to achieve this ambition take precedence over budgetary allocations for defence! I still believe that!
The logic is simple; land is the numero uno asset for a developing nation, the equity for any entrepreneurial initiative. To quote from the article in 2013, "...for private property to exploit its full potential as a key stimulator of growth, a clear and legal title document is paramount, in fact, compulsory. Hernando de Soto, a Peruvian economist, aptly refers to informal property ownership as dead capital". Obviously, no one took my three steps seriously, which is perhaps why I keep saying that I only write for the fun of it!
Nonetheless, I am wiser now; there perhaps are four steps to growth, and the third also has to do with land. A few weeks ago, the Economist published an article on Land in the South-East Asian perspective wherein it was argued how fair farming was crucially important for prosperity; "Land reform" sounds innocuous but involves great upheaval: seizing land from those who have it and giving it to those who do not. Yet radical action may be necessary in countries with big, impoverished, rural populations". And, Pakistan does have a large impoverished rural population, which in search of employment is fast moving to the urban areas, resultantly impoverishing the latter too!
The first example that the Economist gives to support land reforms, is that of our bestest of buddies, our greatest friend in the whole wide world, China. Mao's bloody revolution, according to them, resulted in immediate land reforms. With farmers capturing most of the value of the land they had an incentive to produce more, and apparently grain output leapt up by 70%. Imagine what Pakistan could do with 70% more grain.
Another interesting example is the Korean peninsula. According to the Economist, South Korea, which had the most unequal land ownership and the strongest resistance by the elite, went ahead with land reforms and some landlords lost as much as 90% of their land. North Korea obviously did not, and we all know how both the economies match up today. But that is not all; apparently, South Koreans are 3cm to 8cm taller than the North Koreans! We could have been taller by that much too!
And guess who else carried out land reforms in Asia? According to the article, Japan and Taiwan; and who didn't? Indonesia, Malaysia, Thailand and Philippines! Once again, the difference between the economic fortunes of these nations and their populace are starkly evident! The article concludes, "The Philippines and Thailand have most clearly paid a price, in the form of insurgencies and rural unrest, for keeping poor people down. When weighed against the costs, land reform, done well, starts to look cheap".
Before concluding today, I cannot help taking a swipe at my pet peeve, "Democracy". How come a system where millions of poor in rural areas vote in their representative to look after their interests and to enact laws which favour the poor, was not conducive for carrying out successful land reforms in modern times even after 10 years. I am not sure, but I think land reforms aren't even included in the manifestoes of leading political parties!
Like I said, no one is listening and all that I write is in any case drowned out in all the political noise out there; buy hey, more on land reforms soon!
(The writer is a chartered accountant based in Islamabad. Email: syed.bakhtiyarkazmi@gmail.com)