ARTICLE: This week we continue where we left of last week: the tale of two horses. Those who missed out on the previous column may kindly go to their nearest bookshop and buy last Saturday's edition of Business Recorder.
Word from the sponsor out of the way, let's get back to topic - you cannot ride two horses if you have one donkey.
Pursuant to the developments during the last week, with the horse named Red riding into Ladakh, the entire nation, undoubtedly, is cheering Red onwards and it is pretty clear which horse should we have our behind on. On the other hand, whilst the horse called Sam may be struggling today because of internal catastrophe, one cannot simply write him off. The cold war is getting colder. The decision, therefore, is not that simple, and requires a detailed analysis based on multiple futuristic scenarios. Unfortunately, we are either incapable of carrying out such an analysis, or are least pushed about making an informed decision.
Trying to ride two horses and leaving the rest to fate is not a strategy.
And this indecisiveness is ubiquitous. This column has in the past repeatedly tried to highlight that trying to ride the two horses called Mortal Enemy and Bollywood at the same time was always fallacious. Fortunately, in this case Mortal Enemy, because of its recent bout of madness, has cleared the dust and perhaps inadvertently made our decision a fate accompli. Albeit there are those who still believe that we can ride Mortal Enemy and a third horse called Free Trade simultaneously.
No we cannot!
In the race between the horses called Lockdown and No Lockdown, I must admit, since the consequences are fatalistic either way, I am personally glad that it is not I who has to decide which horse to ride. Whilst it appears that in this race we have decided to put our behind on No Lockdown, it is imperative that choosing financial security over fatality was an informed decision. Herd immunity inherently is the endgame for the flock's weak. However, if we again start shuffling between the two horses, we are liable to get hit by the worst of both worlds: getting whipped and eating onions!
In related recent news, South Korea again closed schools after the biggest spike in Covid-19 cases in weeks. Allah SWT keeps Pakistan safe, Aameen.
In our government's defence, it is not easy making decision when the entire nation is an expert on Pandemics, Aviation, National Security, International Affairs, and the Economy. In fact, some claim to have a deeper insight on the World Order and Global Finance than anybody else on the planet!
This brings us to the two horses called Privatisation and Nationalisation; who otherwise can also be referred to as Capitalism and State Controlled. This decision is perhaps the most complicated, considering that not only the intelligentsia, but every Tom Dick and Harry in the country knows not that they are not economists. Even worse, whilst rocket science works towards universal proof of its theories, Economics, on the other hand, builds theories on models based on a fictional construct of the real world.
During the last week, according to a post in the social media by a celebrity senior journalist, as they are referred to by the electronic media, a senior politician has advised the leadership that the best way forward in relation to the sugar crisis, was nationalisation. Considering that we have intermittently been trying to get on the horse called Privatisation, this is a bombshell.
Curiously, despite the focus on sugar, it is currently still selling at around Rs 80 per kg, if not more!
And I have still not read the two reports, Power and Sugar; getting lazy I guess, Lockdown Syndrome!
My immediate, top-of-the-hat response to the Sugar Industry Nationalisation Tweet was, why limit it to sugar? Why not nationalise flour, automobile and power sector - and as someone pointed out, why leave the banks out? Obviously, a light hearted jab, provoked by the idiom the world is my oyster; if we are going to jump back on the horse called nationalization, let's do it right.
Whilst I am a mercantilist at heart - no secret, that - and therefore support protectionism and a planned industrialization, the thought of jumping on the Nationalisation horse gives even me the jitters. History has made it abundantly evident that men cannot doublethink the market, and hence State Controlled economies will always fail.
However, which horse is not the debate today. That may follow another day; as might write ups on the two reports.
The point is we must make a choice every time, any one horse, in a timely manner, without procrastination, and that too, preferably based on an educated informed analysis. One agrees with Keynes that IF the facts change you change the horse - but not because of whims. Admittedly, some horses are not easy to ride, and then there are horses for courses; which is why it is all the more critical to make an informed choice rather than to just go with the flow.
The punch line:
We need to efficiently take an educated decision about which horse to put our behind on every time; otherwise, we are not getting anywhere sporadically shuffling between two horses.
(The writer is a chartered accountant based in Islamabad. Email: [email protected]. The views expressed in this article are personal. The views are not necessarily those of the newspaper)
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