Many people ask this question that why India and Bangladesh left Pakistan behind in economic development and exports in last three decades. It is really painful to see Pakistan among the list of low income countries. Pakistan’s economy failed on two fronts. Pakistan failed to get the sustainable high growth rate in the economy for couple of decades like China, India and Bangladesh.
It is important to enjoy high GDP growth for at least one and a half decades to double the GDP. Pakistan couldn’t sustain the high growth rate in the GDP for more than 2 to 3 years in a row. This is not enough to develop the economy at fast pace. Pakistan failed to sustain the 7% to 8% GDP growth for more than a decade.
Respective governments in last three decades failed to undertake the process of industrialisation in the country. Pakistani ruling classes failed to modernise the industries and to develop modern infrastructure. They failed to develop the product forces in industries and agriculture. The failure to develop product forces resulted in the stagnation and later decline in the exports.
With the expansion of world trade since 1990s, we failed to find new markets for our products. Our exports to Latin America, Africa and South East Asia are still nominal. We still rely on our traditional markets in Gulf, US and Western Europe. We failed to invest enough money into the new technology and machinery to compete with other countries in world market.
As the result, Pakistan failed to substantially increase the income of its working population. The high growth rate needed to increase incomes of both working people and middle class. The high growth rate and substantial increase in the wages and incomes needed to reduce the poverty.
That is why we lagged behind to the countries like India and Sri Lanka in the gross domestic product (GDP) per capita income. The data shows Pakistan falling behind, and in the case of India, far behind, after having been on par or ahead for most of our history. Whatever we have been doing for the past three decades has not been enough: we as a people are becoming poorer relative to our neighbours, and that should alarm us a great deal.
We need fully functional democracy and inclusive economic policies to rise economically. The political uncertainty and time to time distortions in the political system create hurdles in the sustainable high growth. We need meaningful and serious radical reforms in our political, state and economic structures to unleash the high economic growth and development.
Continuity of the democratic process and strengthening of democratic institutions and pro-people economic policies needed to achieve economic development.
Rapid industrialisation, organising the agriculture on scientific and modern lines and embracing the modern technology and machinery will put us on the trajectory of sustainable high growth rate.
In a new paper published in the Journal of Political Economy in January 2019, noted economists Daron Acemoglu, James Robinson, Suresh Naidu, and Pascal Restrepo find that countries that are functional democracies have GDP per capita that is 20% higher than similar countries that are not democratic. This result is not entirely surprising: both democracy and economic growth require the common ingredient of the rule of law, which, by definition, is absent, in a dictatorship.
The people of Pakistan, wants to see Pakistan more stable, richer, more prosperous than it is today. We need to take our destiny into our own hands to make Pakistan stronger, more democratic and prosper. This can be achieved within a decade with the pro-people economic policies. There is no other way to reduce poverty and unemployment in the country and to increase the incomes.
Handouts and credit and online opportunities are not a substitute for opportunity. Think about it: many of our poor have climbed into the middle class thanks to the opportunity of migration which they grasped eagerly even at huge cost to themselves.
Contrary to what Pakistani analysts put out, poverty is always caused by exclusion from opportunity. Give the poor a chance and they will lift themselves out of poverty. Pakistan needs to create more economic opportunities for its people.
A starting point could be an attempt to look into the apartheid social regime we have created. Could the extreme degree of exclusion of the poor (basically the non-elite) be at the heart of our troubles? Ask yourself the following questions and see if you agree with the answers and you will see for yourself how the poor are excluded.
The poor are totally excluded from elite space. They are seen only as servants and the only place allocated to them in the cities are servant quarters, or slums. We need to change our policies and thinking towards the most exploited and downtrodden people. Pakistani elite and ruling classes need to change its colonial attitude, thinking and policies about the working people and poor of this country. Pakistan has the potential to develop its economy. This potential never fully utilised. That is why we have been left behind.
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