The power nexus

Mansoor Ahmad
Sunday, Apr 09, 2023

LAHORE: All economic planners know what ails our economy, but the remedies remain elusive to serve those with vested interests. A nexus exists between the political elite and a business elite. Both insist on doing things that are irrational economically. We see many industries closed to competition because politicians favour the existing operators to reap rents.

Thus, Pakistan’s economic potential remains underutilised, with political planners acting as income-maximising suppliers of policy favours, rent-seeker lobbyists, and partners in economic benefits.

Protection of domestic industries is a free license to loot the voiceless domestic consumers. Trade protections benefit the influential.

Some politicians block reforms that can spur growth as they fear that real growth would undermine their hold on power. If the reforms agenda is dictated by the vested interests we can say goodbye to effective reforms.

Those politicians that have lust for money and longevity are the targets of powerful business interests, who ensure that monetary and trade policies serve them instead of the nation.

That this does not necessarily mean suppressing the economic activities but to foster it in a way that enlarges their economic base.

An excessive focus on vested interests can easily divert us from the critical contribution that policy analysis and political entrepreneurship can make.

The possibilities of economic change are limited not just by the realities of political power, but also by the poverty of our ideas.

The entrepreneurial potential of this country would be unleashed once we separate vested interests from the economic policies.

We need to implement intellectual property rights straight away. We have to open our economy to foreign competition.

We have to provide a level playing field to all citizens where a man with talent and intellect can rise to become Bill Gates or Steve Jobs of Pakistan.

The world is changing very fast and we cannot plug the development gap by continuing to pursue low value. Our huge labour force would then be confined to low paid jobs both at home and abroad.

A substantial proportion of cognitively capable people does not respond well to formal education. This is the reason for the prevalence of highly educated, unemployed young people in our country.

By providing workers with more options to improve their knowledge and skills, we can provide them with tools to capitalise on developing technologies. Some of these technologies include mobile Internet and social media.

Pakistani youth has shown remarkable ability to learn these technologies. Besides getting gainfully employed these youth can also launch their own enterprises.

Self-employment is a better option for workers that aspire for job security in an unpredictable and challenging labour market.

It is in the national interest to promote the entrepreneurship potential of the youth to drive innovation and GDP growth. But the financial sector in Pakistan still remains reluctant to support new ventures of unemployed workers, as they want collateral that is not available with them.