Searching for new economic thinking

The Islamabad-based think tanks are so good at organising idea exchange forums. It’s another thing that the government seldom pays heed to them. Earlier this week, a seminar on “Economic Policies for Inclusive and Sustainable Development in South Asia”–-organised by the SDPI and Friedrich Ebert Stiftung (a German think tank)-–made for some good food for thought.
The event featured case studies on the region’s “Economy of Tomorrow”. Mustafiz-ur-Rahman, Executive Director at the Centre for Policy Dialogue, Dhaka, noted that the Bangladesh had seen higher growth and poverty reduction in recent, democratic governments. He maintained that future economic growth depended on consolidation of what had been achieved: his country has met most of its MDG targets.
“Due to too many deprivations, India is headed towards a ‘middle-income country trap’ if it did not cultivate its own policies,” was how Dr. Ramgopal Agarwala, distinguished fellow at the Research and Information Systems for Developing Countries (New Delhi) described India’s experience, while calling for a new paradigm for “sustainable prosperity”.
Dr. Agarwala strongly advocated a “neo-swadeshi” (modern nationalist) economic thinking for India if it is to join the ranks of developed nations by 2050. He explained that this new, indigenous paradigm stood on pillars such as social inclusivity, a low-carbon lifestyle, focusing on ‘real investment’ mobilisation as opposed to speculative finance, and resurrecting public sector governance institutions.
Pakistan’s noted economist Dr. Hafiz A. Pasha highlighted that non-economic factors would overwhelm the tomorrow’s economy of Pakistan. In his synopsis, matters of security, energy, governance and ecology needed attention. However, he seemed equally concerned about immediate, emergency problems that have crippled Pakistan’s economy. In his trademark witty style, Dr. Pasha took the government to task for its manipulation of economic statistics.
Ahsan Iqbal, the Planning Minister, lamented that Pakistan is a middle-income country but has social indicators of a least developed country. He advocated the need for emergency measures as well as long-term planning (Vision 2025). He highlighted that Pakistan’s economic future has great promise in providing regional connectivity to “3 billion people” residing in South Asia, China and Central Asia.
In the end spoke Sartaj Aziz, a man of profound vision and wisdom. He may be the administration’s national security czar, but his grasp of economic policy is also remarkable. The octogenarian really struck a chord when he said that the “real constraints (to sustainable development) are political” in nature. Even though economic expertise and experience are there, roots of the problems are political, he said.
Aziz cautioned that the process of social change must precede economic change –-otherwise, existing power structures would only grow stronger, further marginalizing the society’s under-represented and excluded segments. The Pakistan Movement veteran then delineated his blueprint for tomorrow’s economy, which required fixing the following nine areas as prerequisites for sustainable development:
Current skewed pattern of land ownership; nexus between power structures and the elite’s commitment to country’s development; extent and nature of decentralization of governance structures; extent of participation of the poor; degree of tribal and ethnic polarization; responsiveness and capacity of bureaucratic structures to implement reforms; civil liberties and freedom of the judiciary and the press; correct terms of trade for agriculture; and social safety nets.
This exchange of views on growth and development was refreshing, especially when two top policymakers of the regime headlined the event. One hopes they will rub off on their colleagues and get some serious work done in moving Pakistan in the right direction.