It is an interesting contrast: conversation in elegant drawing rooms and upscale cafes is dominated by the state of the economy but is rarely discussed in the chaikhanas frequented by the bottom 99 percent. Growth rate, tax and debt ratios, position of reserves, may be the language of the elite but it is all Greek to the less-privileged.
There is a disproportionate focus on the economy. We have an ever-growing population of Pundits who expound authoritatively on why exports cannot pick up or where the exchange rate will be in July this year. State Bank's reports have become like the perennial best sellers and Bloomberg is the scripture to quote. The Pundits come armed with all the economic statistics but flounder when pressed for infant mortality rates or the percentage of his income that a hari or a kachi-abadi-wallah consumes on healthcare.
It is not that the economy is not relevant. Jobs and prices, around which lives of ordinary folk revolve, depend on the vigour and direction of the economy. Our cavil is with the reliability and relevance of the macroeconomic numbers that the pundits love to spout and fight over. More fundamentally, our obsession with economic numbers makes us lose sight of the bigger picture.
Reliability of economic statistics is not unquestionable. Government is not beyond fudging numbers. After all, we do have the distinction of 'telling and paying' for cooked up numbers reported to the IMF. The bigger issue, however, is the system of computing National Accounts. It is an inexact science the world over, but in our case, it is riddled with assumption-based extrapolations. When, for instance, the agricultural census gets delayed we have to 'assume' growth rate in the livestock sector on the basis of the historical trend. Also, rebasing the accounts, a standard practice, often distorts the picture.
More significantly, what kind of credence do you attach to numbers that capture, at best, only half the economy? With the continuing growth of the informal sector, official stats, trawling only a part of the economy, lose their relevance. Of course, you can use proxies and parities to create better estimates but they are still guesstimates; indicative yes, but definitive never. Little wonder all the prognostications of the economic wizards have a habit of falling flat, with victory celebrations never lasting long and doomsday scenarios never materializing.
Any event, it is such a small economy that even small infusions - a gift here, a 'parking' there - so quickly put the economic ship on an even keel. When threatened with heavy weather you can always count on the IMF sun to shine, until it gets too hot (tough reform conditions) or you think you have saved the day (few months' import cover).
Literature has enough empirical evidence to establish that the strength of a country's economy is fundamentally determined by its political systems. Nations don't fail because of an ailing economy; they fail because of a dysfunctional political system. Almost invariably, a flailing economy is a sure sign of a political order in disarray. If there are spurts of macroeconomic stability, as is sometimes the case under non-representative governments, you can be sure the bubble is destined to burst, as the Pakistan experience has repeatedly demonstrated.
To get the economy right you first have to get the politics right; be honest and honour the social contract. We have a problem here because of the three grave fault lines that haunt us.
First, the very foundations of the Federation are unsound. One can't think of any other Federation where one federating unit alone is greater than all the others put together. It was a similar disequilibrium that created tensions with East Pakistan. Despite a contrived One Unit, East Pakistan remained larger. That the military-bureaucratic-industrial complex was rooted in the West made the equation untenable.
Now we have a situation with a twist. The 'complex' resides in the dominant province. Farhatullah Babar's farewell speech, fearing the day when the smaller units demanded 'parity', did not fall on deaf ears.
Second, there is that 'overdeveloped' organ that cannot be checked. The point is not if it actually intervenes in the running of matters of State; the point is its ability to thrust and parry at will. Even when the sabre is sheathed, the government has to remain mindful of its presence and wary to act in areas where it feels, rightly or wrongly, that it may come in conflict with the dominant organ's interests, especially when there is also the judicial 'Babanama' to contend with.
Third, we have a flawed system of elections, all the way from delimitation of constituencies, registration of voters, polling scheme (including ghost polling stations) to declaration of results. The losers can cry foul, as they invariably do, but the core issue is if the system is geared to make the lower house truly representational, through a fair process.
The issue goes far beyond proportional versus majoritarian, the imprimatur of gaddi nashini in our election process, or the votes-seats disconnect (you can have a majority even with only 17% of voters stamping your election symbol). It is all about confidence in the system. Do we genuinely feel represented? And can we hold those who get elected accountable? The awam ki adalat would make sense only if the awam is genuinely empowered.
In theory, the Senate is the great equalizer, placing all Federating units at par. In practice, our recent Senate shenanigans apart, we have reduced it to a junior partner. The 18th Amendment that sought to empower the provinces was a move in the right direction but in matters affecting the Federation, most crucially the Finance Bill, Senate is more of a debating society than a legislative body - and it is rarely the protector and promoter of provincial interests that it was meant to be. Had that been the case we wouldn't need a Council of Common Interests.
It is not that our structural fault lines defy solution. It can be done - if we genuinely believe in the larger national interest; an interest that is not defined by the narrow self-interests of the powers-that-be.
Until we can address our political issues, discussion of the economy, no matter how erudite, or even unbiased, will be futile. It will be the tail wagging the dog.[email protected]
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