75 Years of Failure in Narrative Economics

Author: Dr Hasnain Javed

I continue to scroll through newspapers to read about how the last 75 years of the country have been painted. There is a plethora of content on the political saga, the economic performances and the social marginalization. However, there is an integral theme missing in everything I have read so far about Pakistan’s 75-year journey.

“Narrative Economics” even though a fairly new concept, has impacted individuals, businesses and countries since the great depression. An economic narrative is a communicable story that can affect how individuals make economic decisions, such as whether to hire a worker or wait for better times, whether to take a risk or be careful in business, whether to start a firm or invest in a volatile speculative asset.

In recent years, storytelling has been utilised differently in political economy literature. Instead of referring to a tale that interprets reality, narrative economics refers to the stories that political agents in the socioeconomic system employ to justify their actions. As a result, the scope of narratives is shifting from observers’ perceptions of real-world phenomena to narratives as real-world phenomena themselves. One of the most interesting examples of this phenomenon in recent times is the rise of cryptocurrency globally.

The Bitcoin narrative includes tales of inspired young cosmopolitans in contrast to uninspired bureaucrats; a tale of wealth, inequality, advanced information technology, and incomprehensible language. For most individuals, the Bitcoin outbreak has evolved as a cascade of unexpected developments. Bitcoin astonished economists globally when it was originally introduced, and it continued to surprise as the world’s attention grew by leaps and bounds. At one point, Bitcoin’s total worth exceeded $300 billion. As its proponents freely agree, Bitcoin has no value unless people perceive it to have worth.

Our inability to secure IMF and other international loans is a testament to the lack of economic confidence of the international lenders.

Now the use of narrative economics becomes critical in Pakistan’s perspective, especially when we consider the elements of fifth-generation warfare. Looking back at the last 75 years, I can comment with utmost confidence that Pakistan has lost significantly on this front in both national and international arenas. In the last seven decades, Pakistan’s democratic system has failed its people miserably. With no example of a stable political representation, the country today stands divided between who is a foreign conspirator, what constitutes the state and which national institution to rely upon. There seems to be an air of doubt over everything from policy matters to geo-strategic moves.

Narrative Economics mean little or nothing when the safety of citizens’ lives, a system in place to protect their property, and a justice system that upholds contracts in the state are missing for progress. Without these fundamental elements, he says, economic development would always be stunted and exclusive. Pakistan has lagged behind other developing nations economically, with debt reaching 71.3 per cent of its GDP. The top 10 per cent of households own 60 per cent of the national wealth, while the bottom 60 per cent of families own only 10 per cent.

The lack of a national economic vision has mostly contributed to Pakistan’s global economic disadvantage. From the Indus Water Treaty to the CPEC projects, we stand in a losing position in front of the enemy. Even today, we lack behind in the number of dams that should be been constructed at least a decade ago. The CPEC projects have come to a complete halt because of our deteriorating economic worth in the eyes of the investors despite the great geographical and regional advantages. Jinnah’s vision of a secular, educated and just Pakistan seems to have been long forgotten in the political race to gain maximum views, shares and like on social media. While the foreign reserves stand at a disheartening $7.83bn.

Our inability to secure IMF and other international loans is a testament to the lack of economic confidence of the international lenders in us. In all these years, Pakistan has never attempted to establish its economic favourability for foreign investors or lenders. Now, this is although Pakistan met all IMF conditions and has successfully made out of the FATF Grey list. Why hasn’t anyone asked the leaders and the policymakers, “where do we lack?” Bangladesh has turned its economic fate around by consistently representing its SME Industry’s strengths to the international market. While our SME industry has barely stabilised, even though there is plenty of evidence in favour of its potential to grow and global cases from neighbouring countries that support the need for the digital transformation of the industry that could have a multiplier effect on production. Several aspects may take hundreds of pages, and thousands of words to highlight the impact of well-crafted narrative economics on Pakistan. The real question is are we even willing to explore new and modern ways to boost the economy? Do we have the political and economic sensibility at the top to let us foster growth through new economic means? Perhaps, our 75th year of failure in this aspect may teach us a few harsh but important lessons for the future.

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

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