By Adul Kadir Hussain
November 07, 2022: I was recently asked by a non-Pakistani colleague, a cricket fan like myself, as to how come Pakistan’s cricketing think tank could make such schoolboy errors. Errors as not having 4 pacemen against India and continuing with a misfiring middle order, despite ample evidence that the issue was a serious one.
My response to him was, “I wish these schoolboy errors were limited to our cricketing think tank. Unfortunately, they permeate into almost every significant decision-making body in the country”.
For many overseas Pakistanis, myself included, interest in the political soap opera that started in the country with the ousting of the PTI government in April 2022 has waned. I find that I am no longer spending hours online reading Pakistani news and on YouTube listening to various talk shows.
Things keep further spiraling out of control almost every day and the day-to-day, minute-by-minute account no longer interests me. What is of paramount concern to me is that no one spends much time talking about what is the economic future of the country, regardless of which political or non-political party is in control.
Pakistan has been on a journey to nowhere for most of its 75-year history but the last 15 years have been particularly abysmal. The chart below compares the change in GDP per Capita between Pakistan, Sri Lanka, and Bangladesh. I did not even bother including India because that comparison became farcical at least 2 decades ago.
During the 80s we compared quite well on this measure with these two countries, the ’90s and early 2000s were patchy, but since 2006 we have fallen behind at an alarming rate.
This piece is not about pointing fingers as to who did what. It is about identifying the fact that over the last 15-20 years Pakistani leadership has failed its people. We have been left behind while others in our neighborhood have moved forward.
Surely, Sri Lanka has regressed in the last couple of years but for them, it is still too early to see exactly how and when they will come out of this dark period.
This historical picture could be discounted somewhat if the future did not look just as problematic.
Obviously, we need a stable political landscape to try to start the journey forward but my concern is that we are all so concerned with the politics today, that no one is really focusing on the pain to come. The Pakistani people deserve the truth, having a stable government is only the start. Things cannot continue as they have for the past 15-20 years.
If Pakistan is to have any chance to emerge from this quagmire, the powers that be must take exceptionally difficult decisions. Pakistan’s economic structure is unsustainable and it cannot become sustainable overnight.
Economic sustainability requires a long-term vision that is implemented by all decision-makers in the country. It requires consistent policy-making, investments in improving productivity in all sectors of the economy, and a firm commitment by leadership to not “rent out” Pakistan’s economic and political future to the highest bidder. As the song by Dido goes:
“If my life is for rent and I don’t learn to buy. Well, I deserve nothing more than I get cause nothing I have is truly mine.”
But even if we were to get all these things it would still take years for us to become an economically viable State. What is required in the interim? Sacrifice! And this is precisely what the people of Pakistan are not being told. Simply put, we spend much more than we earn.
Sustainably improving our earnings will take all the actions mentioned above over the course of many years. In the meantime, the only way to survive is to spend less.
Expenditures such as debt service and defense are not flexible. Expenditures that are flexible will have to be severely curtailed. Pakistan and its people (especially the educated, elite) need to be prepared for years of austerity. Our current account behaves best when our economy is in recession.
As perverse as this logic sounds, we need to engineer a significant recession to correct course. Even after, when growth reappears, it will have to be carefully managed in order to make certain it is sustainable.
So, while we drown ourselves in the daily noise of long marches and Rana Sanaullah press conferences, let us not lose sight of the fact that if we are to make Pakistan a successful and prosperous country, more pain is yet to come. Haqeeqi Azadi does not come solely from marches and populist rhetoric.
It needs to come from significant sacrifices and responsibilities across all sectors and each and every citizen in Pakistan.
*The author is the Head of Fixed Income Asset Management at Arqaam Capital
Disclaimer: The opinions expressed in this article are the author’s own and do not necessarily represent the views of Mettis Link News.
Posted on:2022-11-07T02:33:13+05:00
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