Daily Times

Pakistan, a country born out of immense struggle and unforgettable sacrifices, seven decades after its inception continues to struggle . Despite having secured an independent state we still have failed after 70 years to achieve economic independence and stability. Social equality, religious harmony and good governance, the main principles on which the foundations of this state were laid by its great architects, appear nonexistent. Politics, an institute responsible for steering the nation on the right track, has been reduced to an amalgam of incompetence and corruption. The parliamentary sessions have been turned into scapegoating and blame game settings where a lot of time is wasted in pointing fingers at others rather thanmaking progress to arrive at consensus. In such dismal state of affairsthe reasons for why we have landed ourselves into the current socio economic mess seem pretty obvious.

In order to understand our short comings and move forward a brief temporal overview of the past seven decades of Pakistan economy is vital.

The first decade after independence resulted into the breakdown of an integrated economic set up and was therefore spent in laying down the foundations of new economic institutions.

The second decade was called the ”golden era of development” where we witnessed the handsome GDP growth rate of 7.3%. the focus during this decade was on encouragement of private sector investment. The green revolution had taken off and led to the high growth rate of agriculture sector at 5%. Owing to all this a tremendous boost to the exports was witnessed. Pakistan at this time was viewed as a model and nations like south Korea visited Pakistan to learn from our policies and turned there economies around with it. For Pakistan unfortunately this high growth era was short-lived owing to Indo-Pak war and several other factors.

The third decade saw the economy cooling off with a growth rate around 5%. The five year plans were replaced with annual plans which were rarely implemented. Nationalization policies were adopted which opened the floodgates of corruption and inefficiency. This along with the excessive market regulations led to the shattering of private sector confidence in the government and their investments plummeted.

The fourth decade saw the reversal of these policies and we transitioned towards to privatization again. This led to the revival of private sector confidence and we averaged a growth rate of around 6%. Although the regulations in the market still continued but we managed to land high economic growth. Much of it was also owed to the resumption of US aid to Pakistan as a result of soviet attack on Afghanistan.

The 5th decade was marked by the adoption of umbrella reform programs under the Washington consensus namely the structural adjustment and stabilization programs. Yet due to political instability and successive regime changes the growth remained nominal and could not match the prior ones.

The sixth decade is termed the ”era of economic crisis” where growth slumped and high public debts were accumulated. This decade was ones again marked by political instability and military takeover which caused disruptions in the economic policy making.

The fiscal deficit is at the all time high of 9.1% of GDP. The debt has accumulated into such a huge burden that its suffocating the feeble economy

The 7thdecade again led to nominal growth rates and was marked by high levels of corruption, high debt accumulation spiking twin deficits. The economy also reeled from the impact of 2008 financial crisis, terrorism and energy crisis.

Currently the economic situation is at the all time low with the GDP growth rate lying in the negative territory, unemployment and inflation surging leading to a declining standard of living. The fiscal deficit is at the all time high of 9.1% of GDP.The debt has accumulated into such a huge burdenthat its suffocating the feeble economy.

It is evident from the above analysis that theinconsistent policies have done much damage to the economy. As soon as the new regime comes to power they are bent on discontinuing the previous governments policies. We need to understand that development is a dialectical process where every change brings problems and adjustments. Yet before we reap the benefits from the positive adjustments which take time to surface we discard the policies.

Secondly the successive governments have sought short term gains through faulty policy making. The high spending on inefficient loss making projects undertaken without proper cost benefit analysiswhich add to the fiscal woes of the economy in the long run are least of the concerns of the successive governments as long as they secure short term gains through it.

The most important problem perhaps is the mismanagement of the debt. 22 times we have gone to the IMF and each time have failed to effectively use the debt in a way which ensureseconomic stability.

In order to get out of this dismal state a change in this type of myopic policy making is the need of the day. There is no doubt that such changes will be accompanied with problems but they would most certainly ensure stability and prosperity in the long run.

The writer is an economist, environmentalist, a feminist, an animal rights activist and a poet