Economy handling is a mature business. It requires wisdom, skills and patience to steer the process of growth and sustainable development. Patience is a key element to navigate economy. It is paramount to understand that economy neither deteriorate or revive within months or short time of period. It requires continuous efforts to move on either side. Current state of economy is result of bad management and governance of last five decades. There can be numerous reasons, but the key reason is lack of patience and vision among the ruling elite and people of Pakistan. In cricket terminology, we run economy on 20-20 vision, while it requires skills of test match.
From late, 1960s, the 20-20 approach is prominent feature of decision making, policy development and implementation. Pakistan witnessed shocks to economy and short term and short-sighted policies. During 1970s, socialism was main slogan and process of private industrial development reversed without any home work. From late 1970s Pakistan started to Islamize economy without implementing the very fundamental concepts of Islamic economic system. In 1989, Pakistan discovered structural adjustment program is cure to all ills of our economy. Here comes the IMF, which was followed by other international financial institutions. The concept of 20-20 further strengthened as each program of IMF was designed for certain years. Pakistan continued to experiment and IFIs were part of it.
Since 1989 on ward IMF has been a permanent player. It is advising government to go for structural adjustments. It is trying to micro and macro management of Pakistani economic indicators. Unfortunately, it could not bring change and Pakistan’s economy kept on declining. Current state of economic indicators is the worst of economic history of country. Current government is not different from previous governments in dealing with IMF and structuring of economy. It gave slogan of “Rayasat Medina” but doing nothing to implement the economic system of “Rayasat Medina”.
Pakistan is on crossroads. Pakistan will have to choose, either it will continue on usual path or change the course of action and look for new ways to manage economy. The cost of current way of working would be very high. The viability of country would be in question. Economic condition will not only impact livelihoods and welfare of people but also international standing and foreign policy of Pakistan. Some recent events can be quoted to strengthen the argument of link between economy and foreign policy choices.
Pakistan should try to strike a balance between State Owned Enterprises and private business. Country should not blindly follow the privatization. Privatization is not a sustainable solution
The situation compels Pakistan to change its course of action and look for new ways of doing business, manage economy and governance of country. Pakistan will have to work on two dimensions i.e. economy and governance, simultaneously. However, this time Pakistan will have to change its mentality, it should come out of 20-20 mode. It needs to focus on long term and continuous policies, strategies and implementation plans with a vision.
The guiding principle for moving on this path would be long term planning. First of all, Pakistan should formulate a long-termagendawith name of “Agenda 2047”. The goal of agenda should be moderately developed country in 2047, at the completion of 100 years of Pakistan. The strategy to achieve goal of Agenda 2047, should be phased according to need and resources of Pakistan. It should be developed on the principle of reality and there should be no dream selling. The strategy should be divided in four phases, 1) low hanging fruit, 2) short term, 3) medium term and 4) long term. Each phase should be tagged with a target for GDP and identify the sectors of economy which will help to achieve the target.
Economic structure and state of Pakistan suggests that we should start by focusing on agriculture, tourism and SMEs during the low hanging fruit phase. The target of GDP should be US$ 400 billion. The time period of the phase should be 2 years. It should be followed by short term phase which would have target of US$ 600 billion for GDP. The leading sectors for the phase should be SMEs and light industry. The proposed length of phase should be 5 years. It will be a very critical phase, as it will lay foundation for transformation of economy from primary to secondary. Third phase should be designed for 15 years. The target for GDP would be US$ 1.5 trillion. Leading sectors to materialize the dream would be industry, services and SMEs. The stage should be designed in such a way that it must lay down foundation for second transformation of economy from secondary to tertiary. Last phase would be a complete take off. The target for GDP would be US$ 3 trillion. Leading sectors would be services, industry and SMEs.
These all phases should be design in such a way that these act as building blocks. One phase should help to transit into next phase. The elements or sectors of one phase should not be abandoned with start of next phase. Graduation to next phase means there would be change in position of sector in priority list.
To materialize the dream of “Agenda 2047” Pakistan must look for an anchor country and market. History tells us that availability of anchor country and markets helps to achieve sustainable growth and development. For example, Europe has USA after WW-II, Turkey had European Union, Malaysia had Japan, China etc. Fortunately, CPEC and China provides this facility to Pakistan. Now it depends on Pakistan, how it benefit from this facility.
Second Pakistan will have to restructure and redefine the governance structure. Most urgent thing on governance would be to come out of traditional definition of merit. Pakistan should introduce a new set of indicators of merit, which focus on “capability and character” simultaneously. Character should assume central stage for determining the merit. Second, Pakistan must implement local governance and empower the local governments. Local governments should assume the protuberant role in planning and implementation like China. Planning process in China starts with first input from local governments and in implementation they are the major player. It helped China to sustain rapid growth, development and wellbeing of people.
Government should also introduce some mechanisms to engage business community to play an active role. Inclusion should be across the board and at all levels not only forfew big business groups or men. SMEs, light industry and retailers should be given equal importance. To improve business environment government can restructure Board of Investment and make it a joint venture between business community and government. Third Pakistan should try to strike a balance between State Owned Enterprises and private business. Country should not blindly follow the privatization. Privatization is not a sustainable solution.
Fourth, Pakistan should establish a joint committee to oversee all the reforms and process of implementation. The proposed committee should be comprised of political heads of seven leading political parties, Chief justice of Pakistan, Army Chief, civil society and media representatives. It should be chaired by Prime Minister.
Lastly, Pakistan should follow advise by Deng Xiaoping, to Chinese people, “we should adhere to the basic line for a hundred years, with no vacillation”.Although this agenda is for 28 years, but it provides a good guideline for Pakistan to follow the wisdom of saying.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.