Thursday, 18 June 2009

“What a rich country?” or “Nice to be rich in Pakistan!”

I took around my friend Miskeen Shah around Lahore and to my surprise he kept saying “what a rich country this is?” Let me remind readers of Miskeen Shah who is not well known in Pakistan at all since he does not belong to the late night crowd that meets every night at shadis, parties etc. However, Miskeen Shah is a well known in economic circles overseas because of his expertise and publication record.

Finally I asked Miskeen to explain his remark reminding him that he is in a country that is classified as poor by all international agencies.

Here is his explanation.

“It is a rich country in the sense that it can support such a large amount of waste. If the waste could be eliminated, all the people would experience a serious increase in the standard of living. Currently the system seems to support the waste of a small elite. Indeed the elite is invisibly subsidized in many ways.”

To support his argument, he made three points.

First he pointed to how our city centre was organized. “How surprising that all the land in the middle of he city is not only owned by the government but put to such suboptimal use as spacious VIP housing, government training institutions in palaces, Polo and Goff clubs for the elite! None of these uses reflect the economic needs of the country or are based on any rationale. No one seems to be aware of the hidden subsidy in this resource utilization. To be able to play polo in the heart of town at a negligible fee is a serious luxury and one that can only be supported by the implicit subsidy of government provided land and a tax shelter. Obviously this rich society has no care for extracting the maximum benefit from a resource. But what if it could?”

Second he noted how we manage facilities like the stadiums. “Even the roman forum was utilized regularly. Never have I seen a stadium like the fortress stadium that is utilised 14 days a year. And what a strange approach to a shopping mall---build shops in the wall of a stadium. A huge opportunity exists to use this land better: house a shopping mall, hotel, convention centre and sports complex in the space where the fortress stadium stands.

“But of course, any facility like a stadium, sports complex must be professionally managed. In the US no stadium remains unutilized for even a day. Often they are running multiple events in a day. Obviously Pakistan does not need to make money of such assets! Obviously, the rich beneficiaries could not care less! ”

Third, he pointed to the work habits of the elite. “It seems that every night there is a party and that it starts late and finishes late. Even the country’s leaders make time for such events. It seems that work is of secondary importance.

“Networking seems to be the most important activity and successful networkers seem to be very rich. Clearly productivity is of minor concern! Once again only very seriously spoilt inheritors of some serious wealth have that attitude to life. You are lucky to be one of the rich here!”