Politics and Economy

  Currently, Pakistan is facing one of the worst economic crises of its history. High inflation, trade deficits, soaring debts, declining exports and rising unemployment are the talks of the town.     

  Though the causes of this economic strangulation are many but it is politics of the country which is lying at the heart of the issue. 

   Extractive and hostile politics and unstable political environment have been hurting the economy in multiple ways. First of all, human capital is the baseline on which an economy starts flourishing. But, due to extractive nature of the politics of Pakistan, very few leaders are truly willing to educate masses and eqip them with the moderdays' skills to exel in their lives. They know that development of human capital will be disastrous for them. Consequently, the economic sector is paying high cost of the dearth of the capital. 

   Furthermore, variegated policies of different governments have also harmed the sector. Initially, shifts from liberal policies to nationalization to Islamization of the economy disturbed the growth. And, today, will of every political party to run the economy on its own terms is a stumbling block in the way of economic well-being. 

   Then, in Pakistan, majority of the politicians are feudal lords and most of the others have strong predilection for authoritarianism. They have fear of creative destruction. For them, innovation is akin to end their monopolies. Hence, landforms, usage of new technologies in the agriculture sector and modernisation of the economy are distant dreams which hamper the growth. 

   To a greater extent, class differences, massive poverty, policy gaps and elite capture of the economy are the other gifts of the extractive institution. Social mobility in upward trajectory is impossible for a common person. Red tapism and lack of ease of doing business deter entrepreneurship. Recent statements of IMF's chief and the country head of World Bank -which were about anti-poor policies of the governments - are the manifestations of this reality. 

   Meanwhile, unstable political environment does not allow politicians to frame pro-poor policies. For instance, till date, no Pakistani government has tried to enhance tax net through taxing the real estate sector and other businesses of the top echelon. 

   In addition to this, turbulence in politics has eroded the confidence of international investors. Lack of consensus on viability of China Pakistan Economic Corridor and severe violations of international agreements like Reko Diq case by different political governments are the examples. 

   In a nutshell, the unstable political environment and undemocratic culture of the country are the leading causes of the crippling economy. It is heigh time to fix the challenges by conduction of free and fair elections because only a true democratic and inclusive setup can bring the economy on the right track. More importantly, the leadership has to work on development of charter of economy. Otherwise, short-term measures will do no good.