Daily Times

Political rallies, protests and, recently, the phenomenon of long marches have become a constant feature of politics across the globe. Similarly, the past decade has seen a rise in high-profile social protests that captured the attention of the entire globe, such as the Arab Spring and Black Lives Matter. Global experts, social activists and political enthusiasts need to be made aware of the cause and effects of these political and social gatherings on a country’s political and social construct. Recently, a team of economic experts from the IMF undertook the task of formally measuring the impact of social rest on economies. As they begin to analyse the “risks and economic costs of social unrest,” the researchers have developed a Social Unrest Index using media reports.

Pakistan’s recent Azadi March also made waves in the national and international media and took social networks by storm. However, as the masses and media focus on the political aspect, there seems to be no or little understanding of the economic implication of this instability. The IMF researchers identify socio-economic factors such as inequality as a fraction of the causes of social and political unrest. However, in a country like Pakistan, where the total assets are divided amongst a few of the top elite. The inequality that stemmed from the unjust post-partition distribution has had a lasting impact on the country’s social fabric, where over 38 per cent of the population is regarded as “multidimensionally poor.” At the same time, the percentage is expected to rise in the future. The same study reveals that unrest resulting from socioeconomic factors is linked with a sharper decline in the GDP.

A more considerable consequence is further social disparity, scarcity of decent jobs, lower education opportunities for the masses and even lesser economic opportunities for women.

Simultaneously we have a serious challenge within the country’s bureaucratic structure. Pakistan’s economists have failed to accurately calculate the cost of failed bureaucracy and the delay in the decision-making process. In 2021, 84 state-owned enterprises out of 212 were chosen for privatisation, liquidation or retention in the public sector to meet the structural target of the IMF process to revive the bailout package. However, the sheer absence of accountability in our bureaucratic structure resulted in the loss of Rs429 billion in the FY 2018 and 2019 combined. According to the World Bank, the total liabilities of chronically loss-making SOEs, which are public sector enterprises that have incurred a loss in three of the preceding five years, exceed 8 per cent of GDP. The top 10 annual loss-makers include Pakistan International Airlines (PIA), Pakistan Railways, electrical providers, and the National Highway Authority. The colossal decline in Pakistan’s bureaucracy since its independence has resulted in many economic challenges that continue to dominate economic growth and stability.

One such major case is the Reko Diq project which seems to be eternally caught in a loop of a poor bureaucratic cycle. In recent developments, the economic benefits of the mine over its 47 years life span have been projected to be around US$32.7 billion to Baluchistan. One of the largest copper deposits in the world has suffered years of delay because of our political and technical leadership’s inability to resolve matters on diplomatic and bureaucratic grounds.

The undervalued economy is another consequence of the constant instability in Pakistan’s political, bureaucratic and social structure. Now, according to some economists, this may be a technique leading to faster economic growth. Still, the devaluation is also dependent on several factors such as the tariff, import and export policies etc. An undervalued economy is one that provides excellent returns primarily due to the undervaluation of its assets. To provide some specific instances, Pakistan’s stock market would be categorized as “undervalued” because, despite the KSE index having increased by leaps and bounds, the returns on stocks and shares are disproportionately high compared to their greatly appreciated market value. Multiple factors, such as decades of poor economic performance, poor international investment, slowed CEPC progress, strict IMF and FATF conditionalities and consistent political turmoil, are all compelling factors for Pakistan’s undervalued economy. Unfortunately, this undervaluation has done Pakistan more harm than in the shape of low investors’ confidence, prevailing corruption, poor influence in the regional and geo-political scenarios and more.

The more considerable resultant consequence is further social disparity, scarcity of decent jobs, lower education opportunities for the masses and even lesser economic opportunities for women – constituting a significant part of the population, poor health facilities and a greater frustration amongst the masses – the result is the continuation of the vicious cycle where more prominent and larger groups of people move towards civil unrest and get influenced by the political calls.

I have been the biggest advocate for a robust bureaucratic structure. However, in the face of constant failure, the only logical solution is to introduce a meritocratic system that completely replaces the existing framework.

The writer is the Foreign Secretary-General for BRI College, China. He tweets @DrHasnain_javed