ARTICLE: It is getting frightfully boring to continue writing about the economy; sometimes the other option, writing fiction, seems immensely more exciting. In fact looking forward to the publisher starting an entertainment edition - Fantasy Recorder!
Not that there is much difference between writing on the economy or writing fiction, essentially both have to do with imagination rather than facts. Albeit when writing fiction there are still certain norms that must be adhered too: the plot still has to be believable. In the case of the economy, anything goes!
Someday the Starship Enterprise may even become a reality; personally I am even looking forward to travelling via the teleportation machine - Bota, beam me up! On the other hand, in no imaginable universe can all else be kept constant - a fundamental condition for almost all economic theories.
Even in my wildest, I cannot imagine a domestic fast food chain beating the crap out of McDonalds - at least in my life time - and this is the most basic example. Accordingly, I cannot begin to wrap my head around the fee market theory that allowing imports tariff free and hurdle free will boost local productivity - for my money such a policy will boot out local production all together.
I have also been for some time trying to figure out how, more specifically whether or not, interest rates have any bearing on inflation in a country like Pakistan - the equation just does not balance. Perhaps the theory works in other countries, but why would I care? I don't live in Turkey.
But all of that is teensy when you frustratingly realize that 12 years down we still have not decided on what is right or wrong for the economy, despite repeatedly getting into financial crises, and each time the only difference is the severity of the crisis. Further, each successive Government had their version of Keynesian economic packages, each claimed laurels because the Casino was doing well, and each claimed success because the IMF continued to lend us money. Even today, there are those who sincerely believe that the interest rate should be around 3%, and that the Rupee should be strengthened for the economy to grow. And then there are those who sincerely believe that FDI is the panacea of all our economic headaches - seriously, whenever foreigners invest out of their own comfort zones their sole objective is super profits only!
And then there is the bandwagon effect: nod your heads when anybody screams free market capitalism.
All of that made me think, was I also that fickle? And that became the reason for travelling back to 2011, the beginning of my column writing adventures. The good thing I noticed upfront, even at the cost of appearing narcissistic, that my writing has gotten better with time. The more heartening finding was that my views have been stable and consistent.
Extracts from Business Recorder- Insufficient Pace of Manufacturing by Syed Bakhtiyar Kazmi, 26th March 2011:
Constructive protection of domestic manufacturing require well thought out strategies to ensure transition to resilient business models. The argument that such policies are generally to the detriment of the consumers may apply in developed economies but not where the country is struggling with financial bankruptcy. Interestingly in the current global recession, protectionism policies are once again being considered, even in the USA. According to an article in NYT in 2010 even China, due to rising costs, may need to engage in protectionism to protect its manufacturing jobs from Bangladesh! I for one, have always been curious on how Bangladesh succeeded in the garments industry compared with Pakistan where textile is the primary sector. Apparently, Bangladesh as a least developed nation has access to higher quotas in the Western markets. I remain a strong proponent of national pride, but business is business. Did our policymakers lose out on an opportunity for manufacturers? Communication, infrastructure and energy are additional hurdles for our manufacturing sector. Pursuit of political gains results in industries being subjected to load shedding prior to domestic consumers. It is a mystery how idle plants and consequent rising unemployment is in the country's interest. Shutting down the industry is synonymous to breaking the bowl you eat in. Even in the case of infrastructure, lack of resources is a weak argument. Development should be focussed towards facilitating the industrial and manufacturing sector; consequent employment will take care of the rest. To conclude, today, our manufacturing sector apparently is not geared to spearhead an industrial revolution. While Britain may have taken 200 years, we have an advantage to learn from history. We need not reinvent the wheel. What we do need is a single minded pursuit of industrialisation with a focus on manufacturing sector. Policies need to be considered for protecting and facilitating the growth of industry, after all most of these ventures are financed by the savings of our countrymen.
The above paragraph was written 9 1/2 years ago- back then and today I am all for strategic protectionism for domestic manufacturing as well as a strong supporter of planned industrialisation- albeit I may perhaps have articulated the above paragraph differently today!
Nonetheless, nobody seemingly listened back then, and nobody will probably listen now- but at least I am consistent. Someday, and that day may never come....
On a separate note, perhaps publishing a book of published articles is not a bad idea- looking for a sponsor, any takers Dear Readers!
It was definitely satisfying going back to 2011!
(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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