It was a hot day seventy-nine years ago, on 14th August 1947, when a nation was born named Pakistan. It was the hope of millions who sacrificed everything, including the lives of their loved ones.
As the country marks its 79th Independence Day, every roadside, every building and houses are decorated with green and white flags, while official buildings are illuminated with green and white lights. One hears the milli naghmas (songs) on radio and television, while enthusiastic youth play them in their cars, remembering the blessed day of 14th August 1947 with great fervour and enthusiasm.
Now, as our beloved Pakistan enters its 80th year, we must analyse the doings, the happenings, successes and failures during the last 79 years, try to learn from our mistakes and improve.
Nations succeed when they build inclusive institutions, where lots of people, even a common man, are allowed to participate; investments are made in education and innovation; and, most importantly, power is held accountable.
When power and resources are concentrated, rules change depending upon whom you know, and the system rewards rent-seeking more than producing. Over time, nepotism kills trust, investment and growth, even with talented people and favourable geographical surroundings. It is usually because of weak institutions, which result in slow growth, low investment and less tax revenue, hence more instability. This is a major reason Pakistan is still struggling. It is a failure of governance.
Seventy-nine years is enough of a period to look back and analyse what worked, what did not, and more importantly, what we kept repeating-the mistakes without realising their adversities.
Here, an attempt is made to do an honest and sincere audit of our mistakes as well as successes.
It is important to make a disclaimer: it is not to blame anyone, neither is it a political document, as I am not a politician, but an attempt to build our beloved country.
During the analysis, many lessons were learned the hard way. Mistakes were identified, and amendments are not impossible. Mistakes can be corrected in the coming years.
Following are some lessons learned the hard way:
Lesson 1) Consistency and Continuity
The absence of consistency and continuity beats talent and genius. Pakistan had great five-year plans, inspiring to the outside world, but unfortunately, new governments often change the direction. Every new government has new ideas to initiate and trash the old ones. If one government starts building dams, the new one stops them. Even policies were reversed, whether industrial or otherwise.
No sector gets ten, or even five, years to scale. The reason is that no elected government completed its five-year tenure.
If we look at the countries that succeeded, at No. 1 we see Bangladesh, which worked on cotton garments for 30 years straight. Bangladesh did not grow a single staple of cotton; it imported raw material instead and exported finished cotton garments. It never compromised on quality.
Similarly, we see Vietnam, which focused on electronics for 25 years straight.
The lesson here for us is to select three or four major goals/targets and lock them in for 10-15 years so that no new government can alter the policies.
Lesson 2) Borrowing and Its Aftermath
Pakistan has been borrowing for decades now from the IMF, World Bank, friendly countries and also commercial banks. Borrowing has become a curse for the people. It itself is not bad, but it should be used wisely. It must be done to handle crises and make genuine payments for essential imports, not for luxurious goods.
Before borrowing, analyse why and how much.
Crises include natural calamities like floods and earthquakes, and trade deficits. As we import oil, machinery, etc., we need dollars to make payments.
Our financial mechanism is such that government spending is much higher than tax collection, which implies revenue generation is lower. Also, a part of every loan goes to pay back old loans plus interest.
Continuous borrowing affects the daily life of a common man. As a result of devaluation of the rupee, at times inflation increases. This results in price hikes of every item due to increases in the prices of petrol, power and flour. Hundreds of items become expensive and out of reach for the lower middle class and those 28.9 percent, as mentioned in the Pakistan Economic Survey, living below the poverty line.
It is a vicious circle that leaves no choice but to borrow repeatedly.
There is a way out of this, as there is from every problem, but yes, it is hard and needs strong determination.
First and foremost, the government should adopt austerity measures, cut the heavy protocol system and increase exports to earn foreign exchange-the dollars.
Lesson 3) Set Priorities Right: Invest in People First
This is what our policymakers are missing. It is exactly why we are still in the borrowing trap instead of building. Two important sectors, education and health, have been underfunded for decades now.
We need to spend more, a reasonable amount, on education and healthcare. It is obvious that healthy, educated and skilled people, particularly the youth, will transform debt into growth.
According to an estimate, more than 22 million children are out of school. Public schools lack teachers, books, benches, etc. In fact, many in rural areas are ghost schools.
This needs to be addressed urgently. Teachers need to be trained in digitisation skills as well. It is said that an educated worker earns three times more, hence is liable to pay more taxes.
Our biggest asset, the youth, is underutilised due to the absence of education, skills and poor health. Gen Z is our engine of growth. Somewhere I recall reading, “Every rupee spent on a child is equal to $10 in return.”
The health sector is also a neglected sector.
Clinics and basic health units lack doctors, beds and medicines. Forty percent of children under five years are stunted. A healthy worker is more productive, even if he misses a few working days. Skilled and healthy people get better jobs and pay more tax.
Pakistan needs to have more classrooms, more clinics and jobs with adequate salaries for teachers.
Lesson 4) Weak Institutions Result in an Expensive Country
A country is not expensive only because of oil prices. It is also expensive because of weak institutions that allow corruption, tax evasion, etc. Weak or no accountability is another reason. It reflects mishandling and leakage in the process.
Subsidies never reach the poor. There are fake bills that get passed. At times, development funds also vanish. However, overall, weak institutions, bad policies, economic crises, lack of austerity measures and more borrowing weaken the institution and system.
All the above make a country highly expensive.
The cost of business goes up when regulations are not fully implemented. A mill owner can get away by paying bribes.
The cost of borrowing also goes up when lenders do not trust the system, hence they give loans at higher interest rates.
It is believed that when institutions are strong, countries are cheaper, and when they are weak, people become poorer.
Lesson 5) Energy and Water Are the Backbone of Any Success
Energy and water are the two arteries of a country. Without energy and water, nothing works. If these two arteries stop or are blocked, everything stops.
Without energy, no industry can operate, no IT sector can function, no students can study in the evening, and hospitals cannot operate.
The country delayed making dams, nor did it build small reservoirs to store water. Solar systems were also ignored. This forced us to remain dependent on expensive imported fuel.
Industries cannot work with long hours of load-shedding. To increase exports, industries must work smoothly and production must increase. For this, cheap electricity and clean water are essential.
During the last few years, in the absence of electricity and water, many factories were shut down and moved to Bangladesh.
Water is life. Almost 90 percent of water goes to farming. Pakistan is an agricultural country. We produce fruits that are exported, while cotton is the raw material for textile industries.
Energy needs water for cooling thermal plants, and water needs energy, as tube wells and filtration plants all need electricity to run.
Lesson 6) Administrative Division, Decentralisation or Devolution of Power
Why is this necessary? It is absolutely essential. Without it, a country of 240 million people cannot be governed fairly.
Now, at 79, Pakistan is too diverse, too large and also too complex to be run only by the federal government in Islamabad.
For example, a problem in Hyderabad, Sindh, is not the same as one in Khyber Pakhtunkhwa. Local problems can only be solved by local representatives. Each area has its own localised issues.
Electoral candidates in an area are, or should be, in close contact with their people. The issues may be solved faster.
Most importantly, devolution ensures that every district gets a share for schools and basic health units based purely on population and need.
It is now an absolute necessity that power, money and responsibility must go down to the district and tehsil level. These are essential ingredients needed for development.
Lesson 7) Absence of Good Governance
What is governance? It is not at all a luxury. It is the difference between an expensive country and a developing one.
When governance is absent, every problem gets ten times worse. All the six lessons above reveal that. Energy, water, education, health and debt-all create crises that trace back to this one missing piece: good governance.
What happened then? Who pays the price? Obviously, the people. They pay twice: once in taxes, then again through private generators, water tankers, private gas cylinders and expensive schools.
In the absence of governance, investors cannot plan as policies keep changing. There is no continuity. Similarly, there is no accountability.
Development projects get delayed, costs increase, but there is no accountability. Nepotism is another curse; merit is ignored and appointments are made on sifarish.
Due to bad governance, the country becomes expensive. News reports reveal at times that millions are lost in power-production inefficiencies. In farming, water is wasted and less wheat is grown. Still, we remain unable to adequately tax the agriculture sector.
In times of natural calamities, we borrow to rebuild because infrastructure is not properly maintained.
In view of these issues, it is crucial to work on the above six lessons learned to make the required amendments.
Every sector of the economy needs good governance to work efficiently and allow the beloved country to move forward on the road to progress.
Pakistan Is a Country of Immense Potential
People celebrate cricket wins without realising the increasing number of out-of-school children. It is easy to discuss different ideologies in the drawing room rather than think about unemployed youth.
As Pakistan enters its 80th year, it must strive for “investing in people.” Primarily, this means increasing the budget for education and health sectors first. It means supporting local industry and broadening the tax net.
Jinnah’s Pakistan was not meant to be a country that merely survives for many years; rather, it was meant to be a country with 100 percent school enrolment, clinics with doctors and medicines, and a country where every graduate is employed and happy.
The seventy-nine-year period of survival is over. Now, let us enter the eightieth year with a new promise, new zest for life and enthusiasm to build and develop our beloved Pakistan.
