ISLAMABAD: With the view that almost every sector of the national economy captured by the elite, who enjoy even greater control over domestic power politics and economic policies, experts were of the view that the rent-seeking economic governance model which serves the vested interests of a few has become unsustainable for national growth.
There is, therefore, a need to re-define the governance model of the country for sustainable economic growth through a comprehensive dialogue amongst all stakeholders including the elite, the civil society, political parties, academia and other stakeholders.
This was expressed during a lecture on “Economy and national security: Political economy choices for reform”. The lecture had been organised by the Sustainable Development Policy Institute (SDPI) on Monday.
Professor Adeel Malik, a Globe Fellow on economies of Muslim societies and an associate professor at the Department of International Development of Oxford University, said that the popular discourse on the economy in Pakistan lacks an associative debate on political economy.
He added that the two are fundamentally connected with politics and geopolitics of the country.
Prof Malik added that Pakistan’s economy is facing fiscal Ponzi scheme challenge which is posing serious threats to the poor, future generations and productive sector of the economy.
Data for the past three decades shows that Pakistan’s economic growth has remained volatile, Malik said, adding that it is mainly spurred by consumption rather than through investments and exports. As a result, banking, services and real estate comprise the major engines of growth.
“This present economic order is unsustainable which, if it continues, may consequently have negative implications in the form of growing inequality and violence,” said Prof Malik.
He added that there is a need for redefining the current model of governance to achieve sustainable growth.
To craft a holistic development strategy, he said that it is a dire need to take a cross-sectoral approach.
Commenting on elite capture of the country’s economy and politics, Prof Malik said that it remains a pervasive problem in every civil or military regime, mainly due to the capitalist structure of the economy.
He said that the potential pathways for reforming the economy are the need greater dialogue and debate amongst all stakeholders, where the elite can be engaged positively and convinced for shifting their focus to the areas of the economy which serve the society at large.
The major challenges for such a political economy on choices for reforms include re-allocating power which promotes the greater interests of industry and creating a sustainable political coalition that favours open access to the economy, he said. In a veiled swipe at the incumbent government’s handling of the economy and its choices for the personnel who have been tasked with leading the economy, Prof Malik stressed that the national finance portfolio should lie with an elected politician to win greater confidence of stakeholders.
He called for the need for envisioning a new industrial policy which is also part of the foreign policy strategy.
SDPI Joint Executive Director Dr Vaqar Ahmed said that a broad-based debate is needed on how various elites in Pakistan can work towards a shared vision for economic growth.
He said that it is equally important to study if Pakistani elites understand that their formal or informal actions may lead to a widening of various forms of inequalities in society.