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Pakistan an economic outlier

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A representational image. Photo: Reuters

The economic dysfunction that defines Pakistan is not normal for a country in this geographical location, with this size population, and this proportion of its population below the age of 25. The Pakistani boom and bust cycle is tightening. The booms are becoming shorter and smaller, the busts, deeper and longer.

Pakistan is an economic outlier. India and China have grown at phenomenal rates over the last two decades. So too have Indonesia, Vietnam and Bangladesh. So too have a dozen other countries in Asia and even the wider MENA region. Pakistan’s lack of growth makes it an exception to the rule.

There are a lot of technocratic answers to the question of why there is low or no growth here – but the most important one is hard for economists to deal with in any serious manner: national security.

There are broadly two camps, whether they realise it or not. And until these two camps have a more robust debate about the future of the country, the cycle of economic dysfunction will continue. 

The first group is Camp White Flag. Their core position, when stripped of all its verbiage is relatively simple (and though provocative, also powerful). Camp White Flag says you just cannot grow unless you have external validation of your national story. This external validation is shorthand for giving up strategic autonomy. If you wanted this validation from the Americans, they say (whether they realise it or not), then you should have liquidated the Haqqanis before 2020. Doesn’t matter what would have happened next. Just line up with and follow other countries’ strategic interests rather than your own.

If you want this validation from the Americans, you have to get on the same page with India – no matter how Hindutvadi it is. Sign up to whatever Hindu supremacists in India (whether Congress or BJP or worse) want, throw the Kashmiris under the bus, and the world can be your oyster. For proof, they point to Bangladesh, “Just look at how well Bangladesh is doing”. Camp White Flag is as patriotic and nationalist as any group, and it is not a lack of love for the motherland that they argue this position. It is a lack of other viable options.

The second group is the Camp Desert Fantasy. Their core position, when stripped of all its multilingual opening lines, and its evocative appeals to Turkish soaps operas and local fictions, is also relatively simple (and equally powerful). Camp Desert Fantasy says that growth is a secondary national objective. Security is first. And security cannot be outsourced – without compromising on national sovereignty. Since Pakistan cannot and must not allow anyone – not the Americans, not the Chinese and certainly not some bleeding heart, pro-feminist Pakistani liberals – to undermine the strategic autonomy of the country: any cost is a cost worth paying.

Camp Desert Fantasy is sustained by lots of old men that are used to playing golf once their kids go off to university in AUKUS countries – so the cost worth paying is not borne by them. It is borne by the poor and vulnerable of the country. It is a fantasy that the people of this country will continue paying the price for Pakistani strategic autonomy without eventually demanding that the system be turned over from overweight golfers that start cheating on the second hole to the stunted and malnutritioned lab grown mobs that are being groomed on a steady diet of Ertugrul and Faizabad spirits.

Camp Desert Fantasy, it goes without saying, is super patriotic. But it isn’t as stupid as Camp White Flag thinks it is. And Camp White Flag isn’t as hungry for foreign affection as Camp Desert Fantasy thinks it is. The gap between the two camps is the Valley of Death.

In the Valley of Death, Pakistan’s low or no growth economy has to sustain one of the world’s youngest populations, with a median age of 23, and monthly household incomes that, even when growing in absolute terms, are shrinking because the Pakistani rupee cannot keep up with the short-sightedness of Camp White Flag, nor the arrogance of Camp Desert Fantasy. This gap should remind us of the last Valley of Death a united Pakistan endured.

The mockery and contempt for Bengali Pakistanis from 1947 to 1971 helped cause the dismemberment and partition of Pakistan. The generic lack of understanding of Bangladesh from 1971 to today is equally toxic for Pakistan.

Here is a prediction that I am willing to make with almost zero qualification: Bangladesh’s so-called submission to Indian hegemony in the region is a temporary ruse that it uses to sustain a high growth economy that will catapult the fiscal capabilities of the Bangladeshi state into a stratosphere in which Bangladesh can reclaim strategic autonomy in relation to India’s genetic predisposition to occupation, interference, extremism and hegemony. Bangladeshi strategic autonomy is anchored, for Bangladeshi strategists, in a political and economic programme that prioritises the ability to make decisions that neither necessitate white flag submissions to foreign powers nor caving into the temptation to construct fallacies and fantasies about the realm of the possible.

When Bangladesh will make the switch is harder to predict, but the last people that should underestimate the intensity of Bangladeshi strategic autonomy are citizens of the country from whom Bangabhandu wrested that very autonomy – a Bangabhandu that was a more patriotic and intensely “Pakistani politician” in his youth than many of those he eventually fought against.

Both Pakistani camps are dead wrong about Bangladesh. The Bangladeshis have not signed away strategic autonomy. And the current tactic of Bangladeshi economic growth is a building block of Bangladeshi strategy.

Now for the good news. Pakistan is no Bangladesh. Its starting endowment, here, now, in 2021, is so powerful that it is an indispensable middle power – even whilst its leaders bicker over transfers and postings, cannot find and keep finance ministers or IGs for Punjab, cannot convince the IMF of its seriousness on fiscal issues, and cannot grow the economy without eventually choking it again. Even in these circumstances, Pakistan commands the attention and grudging (sometimes bemoaned, whiny, grudging) respect of global powers – large, middle and small.

Camp White Flag is right about at least one, very important thing: Pakistan cannot be free until it can pay its own bills. No amount of strategy or wordsmithing can alter this. Camp Desert Fantasy is right about at least one, very important thing: Pakistan cannot be free, indeed cannot be, if its sustenance is designed as a subset of India’s hegemony.

But whilst these seemingly competing polar positions are etched in stone, Pakistan’s options are not. The capability of the Pakistani state and the imagination of Pakistani strategists should not be shaped or restricted by the idiocy that is front and centre on a daily or weekly basis. It should be shaped by a coherent dynamic of give and take between Camp White Flag and Camp Desert Fantasy. In this middle ground, there is much pain. There is mockery (‘pick a side!’), there may be the stink of defeat (temporary tactical setbacks), and there will be the agony of ‘less’ for those that are used to ‘more’ (a dismantling of elite capture by expanding economic opportunity and social mobility).

Only a reforms-driven economic agenda can deliver the elusive sustained high growth that the military and civilian leadership claim they want for Pakistan. And only this high growth can offer Pakistan the long-term strategic autonomy, and ‘the self and sovereignty’ for which Pakistan was wrested, by Quaid-e-Azam, from the clutches of majoritarian right-wingers that today seek to paint South Asia and the Middle East in their saffron hues. To resist this will require putting away our white flags and snapping out of our fantasies. Reality is hard. Surviving it will be even harder.

The writer is an analyst and commentator.


Originally published in

The News

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