Economic Prosperity and Good Governance

Economic Prosperity and Good Governance

The present day world links economic prosperity of a country to the confidence – confidence of investors in a country’s economic policies, law and order situation, political and financial stability and fairness of its judicial
system. The economic managers everywhere believe that money has no religion or any national affiliations, and thus, in the absence of the above mentioned assurances to the investors’, they are less likely to respond to the empty slogans of ‘your nation/country
needs your money.’

Politically, about five years ago, Pakistan was being ruled by a dictator, but in economic perspective, this was among best of the financial times the country observed in its 65-years of existence. The country had come out of IMF
programmes, tax returns were increasing, stock exchange was witnessing a golden time and both the average income of ordinary citizen and their living standard was significantly improving.

Come February 2008, and there came a much-awaited democratic setup in the saddle. Right at the onset of an era that looked like panacea to the innumerable problems the country faced, everything seems reversed, at least in economic
perspective. Initially, finding escape in the argument of “our predecessors did all the damage” there came hikes in the petroleum prices, followed by increase in the prices of electricity, LPG, CNG followed by similar trends for everything else sold in the
markets of this land of the pure.

And now, with 100^th announcement of the prime minister, and every other minister who finds some space on the television, to give relief to the citizens, people have been told that electricity prices are going to be up
by a hefty 22 percent. With the next, and this government’s last, budget to be presented within a month’s time, there are hopes that the president will soon take a ‘notice’ of this price hike and then the already non-available electricity will become further
costlier.

Put this situation before some ambitious PPP loyalists, and s/he will tell you how difficult it was to complete five years for a ‘democracy’ faced with war on terror, a ‘challenging’ opposition (opposition??), unforgiving media
and judiciary and least cooperative and unsympathetic USA and rest of the world. And if you dare to ask what of these kept the ruling lot from overcoming energy crisis, rampant corruption, a deteriorating law and order situation in Karachi, Interior Sindh,
Balochistan and rest of the country, and they would tell you that you smelled knitting some conspiracy to undermine the nascent democracy in Pakistan. A similar response will be served when you dare to ask how come within last four years the country’s internal
and external debts have more than doubled and why the central bank is compelled to print almost 3 billion rupees a day to make up with the expenditure of the government, and where on earth all this money is going.

Leave alone the ruling lot that is utterly exposed for its inability, shortsightedness, corrupt and cunning political approach, even the major opposition party of Pakistan has no clear roadmap to come out of the dismal state. The
only answer they have to the ailings of the country is that they will fix everything after assuming the power. How will they fix it, there is no clear or logical answer. They even don’t realize where the problem lies, and how can it be corrected.

To the social scientists, political economists and of course to the economists, the roots to the country’s present dismal state of affairs lie there in misgovernance. Everyone with an iota of understanding of Pakistan’s economic
potential understands that it, primarily, is a labor intensive agrarian economy. While this fact is perceived to be the biggest weakness of the country, this also is the point where from Pakistan can drive its strength from.

The panacea to Pakistan’s problems lies in having ample amount of external and internal funding (for investment in industry and agriculture). Having enough funding at an honest government’s disposal means improved law and order
situation, more money available for the private sector, more development work leading to greater employment and sustained provision of cheap energy, and of course greater financial cushion to pay back the ever increasing debts. Moreover, having greater money
also means less financial reliance on other countries and IFIs and their less intervention in our foreign policy.

However, a million dollar question is that wherefrom this internal and external funding will come. Well, the beginning will have to be made from within by introducing a fair and robust tax system. We will have to bring agriculture
and farm income under tax, will have to rely more upon direct taxes instead of indirect taxes, and will have to establish a good will among the masses by showing that their hard earned money is not being wasted, rather, being used well and they are the primary
beneficiaries of its use.

Once this is done, this will prompt the overseas Pakistanis to bring their money to the country as well as to those who have sought other destinations of investments for the safety of their financial capital. In doing so, the foreign
investors will also gradually start coming in and if extended conducive business environment and safety of their life and wealth, they will definitely be interested in exploiting a vast market of over 180 million people.

But the important question is that all this will happen when ‘governance’ – the panacea to all problems, will be improved. And it will only be improved if we, the people of Pakistan, will learn to make better use of our votes,
for the larger good of this country, and that of our own.

The writer is a researcher at Sustainable Development Policy Institute (SDPI) and can be reached at
fayyaz@sdpi.org.

Short URL: https://www.newspakistan.pk/?p=20711

Posted by Fayyaz Yaseen on Apr 29 2012. Filed under Opinion, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry