There was a time during the 1990s when we used to talk a lot about how we wish we could emulate the Asian Tigers. That had remained just ‘talk’ and nothing more as the route that the Tigers had followed to attain their explosive prosperity came in our way. It was too secular a route to ‘affluence’ for a country that wore its religion on its sleeve.
We were already too satisfied and also took proper pride in being the authors of a five-year plan that the South Koreans adopted and left us far behind on the road to prosperity. But we did not even mind that!
And during all these years we would keep pointing to the dull and drab India and its so-called ‘Indian rate of growth’ that had got stuck for decades at around 4-4.5% and compared it with our ‘shinning’ Pakistan growing at the rate of 6% on an annual average. Once explaining the difference between the two countries the late Mehbubul Haq, the then Pakistan’s finance minister, told a group of visiting Indian journalists “that India, as a nation has owned up poverty while we, as a nation have rejected it.”
But then as the Indians used their sustained low growth rate to build enormous physical and social assets during this period we in Pakistan kept sustaining a culture of living beyond our means enhancing our dependence on foreign dole offered with strings attached undermining our sovereignty. Indeed, the then military dictator, President General Ziaul Haq, told the then Editor of the defunct Far Eastern Economic Review weekly that in his opinion the on-going war (the first Afghan war) would never end as it was being fought between two super powers, and implied that the flow of US dollars into Pakistan, therefore, would continue forever.
He, therefore, had no plan ‘B’ in case the war ended and one of the super powers won it! So, we missed a god sent opportunity to restructure the economy using the financial space being provided by the first Afghan war related dollars pouring into Pakistan by way of rent for our services being rendered to the free world in the Cold War’s final round.
Today it is China we would like to emulate. But could we match the sheer scale of China’s overall achievements when it comes to poverty alleviation? More than 850 million Chinese citizens have been lifted out of extreme penury in under four decades.
Attaining independence nearly 26 months after the birth of Pakistan, China’s journey from an extremely ‘have-not’ country in October 1949 to one that is today standing shoulder to shoulder with the US on global economic ranking is nothing less than a miracle. But for accomplishing this miracle the one billion plus Chinese people had to undergo a three-decade long, ‘hand-to-mouth’ life while assets were being created by the trillions in cash and kind. It was a life of sacrifice from cradle to grave with just a few pairs of unisex uniforms, a single room-adobe and no more than one-child family. With markets and shops sans goods, most of the individual earnings were going into savings.
Here is how they did it. First, acceleration of industrialization and urbanization in a country of over one billion people has transformed a large number of the agricultural surplus labor in the countryside into urban employment in China.
Second, the system of land ownership had notable consequences for both the occurrence and the mitigation of poverty in rural China. The distribution of cultivated land in rural China has been quite equal with bottom quintile households owning about 90% of land areas as the top quintile owned, much more equal than those for income and consumption per capita.
Third, universal social development programmes made contributions to the income growth of the bottom households. China has implemented a couple of social development programmes in rural areas since 2000, including universal compulsory education up to grade 9, rural medical cooperative system, social pension system for rural residents, and a minimum living allowance scheme.
Last, but not least, targeted poverty reduction programmes, in place nationally since 1986, played an important role. The Chinese government launched a package of targeted poverty reduction programmes covering broad areas, from physical infrastructure, social development, to industrial development and income generation to assist poor households and poor areas and improve their ability to share the benefits of national growth and generate more income by themselves.
Could we emulate this performance? And that too with at least three decades of life of ‘hand-to-mouth’? One wonders! Ironically, we have been doing exactly the opposite all these years. While China was opening up its port city Shenzhen— only 50 kilometers away from Hong Kong which was still under the British Crown in 1979—-to the world and its markets, Pakistan under President General Ziaul Haq was closing down the Karachi Export Processing Zone. It had already stopped the construction of a seaside Casino terming gambling as un-Islamic and offering a god-sent opportunity to the nearby oil-rich but still too underdeveloped Islamic country, the UAE to take advantage of its location and become within a matter of a decade the economic hub of the region.
Not only that. Ghulam Ishaq Khan, the super duper financial wizard of General Zia had by the time he handed over the portfolio of finance to his successor in March 21, 1985 and joined the Senate as its Chairman, bureaucratized the entire manufacturing base established by Prime Minister ZA Bhutto in collaboration with China—the Heavy Mechanical Complex, the Heavy Electrical Complex, the Machine Tool Factory, the Special Steel facility, the Textile Machinery fabrication facility, the Steel Mills and the nationalized banks. The favourite bureaucrats of GIK having no idea about running such enterprises had simply destroyed these facilities in a matter of a few years. And the nationalized banks were fleeced white by borrowing from them for budgetary support at the rate of at least about 15% less than the rate at which banks were taking the deposits from the general public. The remittances that the overseas workers were sending in were being wasted on Japanese made electronic gadgetries instead of marshalling them and using them in setting up manufacturing units for making the same at home.
Since the ZIA-GIK rule, the country has been living on foreign-dole, offered with strings attached, especially from multilateral organizations like the IMF, the World Bank and the Asian Development Bank. Bilateral donors used to offer concessional assistance through the Paris Club, but 99 Cents of such an aid dollar went back to the donors by way of transfer pricing, consultancy fees and shipping charges. Thus the mountain of debt has continued to climb ever higher all these years since 1988 while our earning capacity has kept declining.
Now we have reached a point where we find ourselves wishing perhaps to emulate Bangladesh, our former Eastern Wing which has succeeded in lifting 25 million Bangladeshis out of poverty line in a matter of 15 years.
Bangladesh’s economy has soared by 7 to 8 percent per year, according to the World Bank. That was faster than China’s.
What was Bangladesh’s secret? It was education and girls, says Nicholas Kristof, Opinion Columnist of New York Times (What Can Biden’s Plan Do for Poverty? Look to Bangladesh, published on March 10, 2021).
“As that nation turns 50, its surprising success offers lessons about investing in the most marginalized.
“In the early 1980s, fewer than one-third of Bangladeshis completed elementary school. Girls in particular were rarely educated and contributed negligibly to the economy. But then the government and civic organizations promoted education, including for girls. Today, 98 percent of children in Bangladesh complete elementary school.
“Muhammad Yunus, the Nobel Peace Prize winner who pioneered microcredit in Bangladesh and elsewhere, founded Grameen Bank, which turned women into entrepreneurs — nearly 100,000 became “telephone ladies” over four years, selling mobile phone services — in ways that helped transform them and their country.
“The nation’s garment factories have given women better opportunities and Bangladesh is now the world’s largest garment exporter, after China.
“Educated women also filled the ranks of nonprofits like Grameen and BRAC, another highly regarded development organization. They got children vaccinated. They promoted toilets. They taught villagers how to read. They explained contraception. They discouraged child marriage. Bangladeshi women now average only two children each (down from seven).
“The World Bank calls Bangladesh “an inspiring story of reducing poverty”. In short, Bangladesh invested in its most underutilized assets — its poor, with a focus on the most marginalized and least productive, because that’s where the highest returns would be.”
Can a country which is still reluctant to officially recognise Malala as a national icon dare emulate Bangladesh and put most of its eggs in the female basket, especially by focusing on universal girls’ education to attain a modicum of prosperity in a matter of say a decade or two?
Copyright Business Recorder, 2021
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