Development 2.0--by Nadeem Ul Haque

Whether there is a Dharna, a flood, or a leaky Fawcett, ‘analysts’ are quick to point out economic consequences. When the flood of 2010 happened, the FM would sing this story of how Pakistan has suffered and the donors loved it. Their doleful expressions and our FMs heartbreaking story (meant to cover our policy failures) outdid Hollywood pathos in real time. Some donors actually pushed  us toward the hyperbolic as their business  thrive s  on  country  misery. Of course all the government wanted was more money to alleviate the pressure of hard policy decisions. Now again we are counting the economic impact of Dharna ranging from 300 to 600 billion. Again all manner of hyperbole is being used to estimate this cost.  With Nominal GDP at about RS.25 trillion, output per day is about RS 68 billion. Recent political shenanigans have lasted about 20 days. If the wole country stopped working for 20 days the total cost would be about Rs 1.3 trillion. Now thi...

Save Democracy! Save the Constitution! The 2 Dharnas with all their dramas have generated a deep division in the Pakistan media and perhaps even society. One group (comprising of a strange amalgam of older left liberal activists, NGOs and the old guard politicians) continued to see the invisible hand (which never revealed itself) of the army and a potential coup that has not happened till the time of this writing. Another group (another strange concoction of some youth, TUQ followers, and some media celebrities) chased a confused idealistic vision of Naya Pakistan free of corruption and maladministration. Unfortunately, the debate really did not get beyond name-calling, conspiracy-searching and crude personalized invective. Dharna crowd could not clearly articulate a vision that grabbed the population at large and overplayed their hand hobbled by incredible ultimatums and outrageous ‘Cromwellian’ demands to wind up parliament. The ‘save democracy’ crowd on the other hand refused...

Understanding Growth and Development Fundamentally what has preoccupied most of economic thinking over the centuries has been the question “ how can living- standards be improved for most of humanity”. Answers have varied but the quest remains the same. In some sense this has been an eternal struggle for mankind. Most religions have been based on giving us order so that human welfare can be maximized. Utopian philosophers have also developed visions on how to organize society so that people can live better. This very human quest also fires up debates and people tend to be vehement in defending their version of utopia or faith without even feeling that they are merely preaching. Everyone seems to know how people’s lot can improve if only their prescription were followed. The development community has also fallen prey to this prescriptive approach.  Experts pretend to have solutions which if followed will lead to riches not only created but well distributed among the citize...

Lord Keynes had famously said that “ Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist” Pakistan offers the best illustration of Keynes’s statement. Here we are still suffering from S M Akhtar even though most kids don’t even know who he was. If you know this name you are probably old. I remember I could never read that book called Economic of Pakistan by S M Akhtar. It was like memorizing the economic survey and a plan both of which are unreadable documents. The trick was to memorize numbers and throw them back at the examiner. And you also had to kind of compartmentalize your mind. Whatever you learnt of real economics—theory and empirics—you kept separate from the economics of Pakistan.   Pakistan economics is still recovering from the Akhtar. And it is never more apparent than at budget time. People treat the numbers of the economy with the same sanctity that we treated them when t...

Pakistan society at all levels has a very uneasy relationship with technocrats.  The common refrain is, “we want ‘doers’ and not ‘thinkers’. The implication being that we are a ’doing’ and not a ‘thinking’ people. I confess, I have no idea what this ‘doing’ is that we take pride in? What wonders have we created in our country to allow us to take such pride in our ‘doing’? In the same vein, we keep looking for ‘practical solutions’ not theoretical. Anyone who says something that we do not like is labeled  ‘ impractical ’ . And  please do review  where  our ‘practicality’ has got us? Invariably, column-writers, conference participants, TV anchors find some way to point to the flaws of what we call technocrats. There is a deep distrust of them? Who are these technocrats?  It is a loose term that we use to lump all semi-well clad, reasonably well-read people who are outside the government. I have often tried to find out what is the difference between ...

The aid establishment has grown on the basis of 2 assumptions 1. That there is a capital shortage in poor countries and 2.  That these countries lack the ability to make policy either because of knowledge or information shortfalls. The world has changed and these 2 assumptions are now untenable. Capital markets are flush with cash and they are eager to push it on to poor countries. The internet and globalization has made knowledge easily accessible to all. Most countries now have all manner of expertise. They are all exporting experts to the west. Despite these developments aid continues to grow. Financial flows are small. Now aid establishment is retailing policy advice, capacity building and technical assistance. While reports and consultants are surrounding poor country policymakers making them feel good, talent from those countries is being released to do outstanding work in the west. Yet their governments would rather have aid than bring back talent. And aid seems to ...

With Shahid Kardar Happy days have returned. The privatisation process has been resumed in earnest. So goes Islamabad’s self-congratulatory declaration on the Rs38 billion raised from the sale of its 20 per cent stake in UBL. The authors of this article, who probably have been the strongest proponents of the free market in recent decades and have generally pushed for a more market-based open economy, should then be equally happy. We, however, feel that privatisation, done wrongly, can have perverse results. To this end, we refer to this deal to illustrate the several questions that should be widely debated so as to inform the government’s privatisation policy. As mentioned above, we have long advocated the adoption of a more deregulated, open, market-based economy. Privatisation is but one step in that direction. Most public policy analysts would agree with the following principles of privatisation: a) The divestment should improve the efficiency and profitability of the operat...