Easy money bane or boom?

While finishing up my Masters programme in the USA, I received an interesting letter from the bank which said: “Congratulations for attaining higher academic credentials. You are now ready to embark on a journey full of opportunities.

Estimated career earnings are around $ 5 Million. Considering your future potential the bank is pleased to offer you a credit line for $ 5000/= Why wait, start enjoying life right away.” I had a big laugh, trashed the letter for my long-term well-being.

After receiving my degree I was free to fly back home. Unfortunately, most graduating students fall into this trap of easy money.

It always results in a short-term pleasure with long-term pain. Fortunately, when I started my professional career, I was advised by my old man; “Money should be first earned and then spent “.

My mother advised me to save 25 percent of my income while father being a businessman was more conservative, he wanted me to save 50 percent to invest and build up my own capital. I followed the middle road but always lived within means to remain debt free.

The Islamic Republic of Pakistan fell into this debt trap under the first dictatorial regime. The International Monetary Fund (IMF) made a big entry in the decade of the sixties.

Earlier when the first Prime Minister Nawabzada Liaquat Ali Khan visited the US he refused to sign treaties but accepted foreign aid. My father’s friend ‘Nanna’ (Anwar Ali) the great cartoonist of Pakistan Times drew an interesting picture of the PM walking on crutches.

Unfortunately, we have now forgotten how to walk without them. Despite his honesty and hard work in building the new country, I think he committed two blunders: Accepting the US aid and promoting the first Sipah-e-Salar against merit. Pakistan has to recover from the menace of both for its progress and long-term sustainability.

As the first born free generation of Pakistan we have weathered several storms and have been privy to several encounters that shaped the destiny of our nation. An interesting after dinner conversation took place in our house. It was early sixties. Ayub Khan was building his economic team on the dictation of his foreign masters. My father’s relative, Dr Anwar Iqbal Quershi, a senior economist had retired from the IMF.

He had started his consulting venture in Karachi. He was called for an interview by the first dictator. Dr Qureshi wanted to share his ideas with my father the entrepreneur. On his way to Rawalpindi he had an overnight stay in Lahore. He had a fast track debt driven plan to expand the economy of the country. His plan did not sit well with my old man as the family did not indulge in interest-based financing.

There was a heated discussion. Dr Qureshi was warned about the grim ground realities of the businesses in the country.

Repayments were slow, the culture of payback did not exist. Supply of easy money proved to be disastrous as predicted. Corruption, over- and under-invoicing became the order of the day. Those who compromised were rewarded.

The concept of ‘Muk Muka’ (Live and let live) was set in. Honesty and integrity were compromised. Upright people like my father Nazir Ahmed Malik the soldier of the Quaid and recipient of ‘Tehreek-e-Pakistan Gold Medal had to struggle for a principled existence in the new land.

Those who believed in a black and white world could not navigate in grey areas which required compromises of all kinds to have access to easy money, including gratification (Rishwat) or speed money as it was termed.

The generation that had struggled for freedom could not fathom this debilitating change. I remember the common outbursts of the founding generation; “Kiya Pakistan hum nay is leay Banaya tha?” (Did we create Pakistan to be pushed around). For them it was another kind of struggle which is best defined as; ‘Out of the frying pan into the fire’.

The battle for freedom was won by them but the war was lost when they were treated as slaves in the free land. It was indeed painful for those who believed in honest hard work strict enforcement of merit, which went missing in the new land when easy money was poured in and merit compromised.

Today the Islamic Republic of Pakistan finds itself trapped under debt from which there seems to be no exit.

The Garrison State continues to borrow to build its defences while the internal fissures keep expanding. It is time to look inwards. I am reminded of a childhood tale narrated by the personality who rocked my cradle; There was once a very well dressed lady whose children were shabbily clad, a wise man saw them and commented, “Maam you are naked”.

Unfortunately, as a nation we have lost all our coverings, while the party goes on within the corridors of power with the support of easy money that carries a heavy payback burden for the masses.

It is never too late to come back on track. Nations can rebound under honest and able leadership which has been missing in the last several decades. Strict adherence to merit and reliance on indigenous resources is the best way forward. It is a simple and straight forward formula of nation building successfully tried by several countries that surround us. Easy money corrupts while denial of merit destroys institutions.

Copyright Business Recorder, 2025