I think it was June of 2006 when I was fired as Chief Economist of Planning Commission by a Prime Minister who did not take kindly to my take on the state of poverty in the country. While still recovering from shock, still standing in the office where I had been dumped, the phone rang. It was Nadeem Ul Haque, then the head of PIDE. “What does a chief economist do?” he asked. “Nothing really,” I said quickly to nip a discussion I did not want, in the bud. “That’s great. Without my asking, I have been made the Acting Chief Economist,” he said in his typical restive voice. He had a foretaste of the organisation as an ex-officio member. But the new posting and experience really let him see through the nothingness that had characterised the organisation since the 1970s.
His restiveness comes from his London School of Economics days of a rabble-rousing revolutionary in the 1970s. In the 1980s, I saw him at the University of Chicago, immersed deep in counterrevolutionary economics. He could not be accused of being a Friedmaniac, but he did join the International Monetary Fund – the ideological extension of the Chicago School. His restiveness continued, regardless.
Working with aid donors, he seems to have found that if revolution could not be exported to countries like Pakistan, reform had no chance. There is a certain indigeneity to society and culture that forms the environment for the economy to move forward. Disregarding this aspect explains the emptiness of donor-funded reform. Later, when he became Deputy Chairman of the Planning Commission, the recipient’s side of the story became clearer to him.
In the formulation of the Framework of Economic Growth, the dream come true in Looking Back: How Pakistan Became an Asian Tiger by 2050, he was practically a loner. The donors looked askance at it. Steeped into routine, professional colleagues in the Planning Commission kept their distance. Ministries headed by generalist bureaucrats dismissed the Framework as just another optimistic plan from the Planning Commission. In their view, the only change was in the name and the time period – from plan to framework and from five to three years. The National Economic Council, headed by the Prime Minister and comprising relevant ministers and all the chief ministers approved the Framework, as they had approved the Programme 2010 and Vision 2030 in the past (and Vision 2025 recently). No secret was let out when Haque observed: “As with all policies of reform it was neither fully understood nor implemented, and finally shelved.” He thinks it is still available on the website of the Planning Commission. It is not. As a matter of fact, all past documents starting with the first five-year plan have been removed from the website. As for reform, the Planning Commission has been re-christened as Ministry of Planning, Development and Reform.
Haque, however, is not one to give up. In this book, he has created a fantasy world of his own, somewhat like the famous Urdu writer, Ghulam Abbas, did in his short story “Dhanak” in the 1960s. Abbas fantasised that Pakistan had reached the stage of development where it successfully launched a spaceship on the moon. The mullahs declared it sacrilegious and incited a movement culminating in their ascendency to power. Interestingly, Haque starts where Ghulam Abbas left. “All professions in Pakistan were licensed, except that of mullah’s.” By 2050, the mullah and the mosque had been regulated, as part of what he calls the software of growth. The regressive laws of the Zia era had been repealed.
The Framework, indeed, is the software of growth. It moves away from sectors and looks at development as the development of the communities, building of the state and cities. Local governance, “friendlier to density, commerce, mixed use, public spaces, and opportunities for youth, including entrepreneurship” is an essential feature of the Framework.
What prevented the software from developing in the first 70 years of Pakistan’s existence?
A long list of answers is available. The local elite stepped into the shoes of the colonial elite, perpetuating the extractive nature of the state. A poor governance/rent-seeking trap restricted social mobility. Talent first left the government and then the country. With negligible intellectual capacity, the government abdicated its responsibility to do serious policy thinking. Projects and programmes pushed by the donors also brought in their train an army of consultants who would do the thinking on behalf of the government. Even the letters requesting aid came to be drafted by the donors, reducing the policy makers to signing machines. Policy was fragmented, owned neither by the government nor the donors. While the debt piled up, austerity regimes cut education and research funding. As Haque puts it, “In austerity, thinking shrinks first.” This shrinkage and eventual elimination of domestic development thought was the basic reason behind the failing state. Donor-funded reform in education, health, tax structure and many other areas had the unintended consequence of achieving the opposite.
How did the transformation to an Asian Tiger come about? Where did it begin? It came from the bottom, not the top. No Great Man led it. These were the ordinary men and women. The society was in ferment. What Nadeem calls networks started to emerge and spread. His early left leanings and the bringing up in Lahore show up here as well. Then there were study circles and other literary and cultural fora, discoursing on issues. Now these networks reflected the spirit abroad. The Enlightenment in Europe had happened before the Industrial Revolution. It couldn’t be different here. Discussion, debate and research began to happen and compete in the free market of ideas. Universities gained their freedom of thought and autonomy in governance. Locally funded research, carried out by professors liberated from off-the-shelf best practice and intellectual slavery, produced knowledge in the service of society and made its presence felt. Reform was informed by this knowledge.
Network debates impacted upon the thinking on the civil service reform. The colonial mind-set was challenged and the strongest trade union standing in the way of change was busted. The pyramid was flattened. They were paid well without the colonial legacy of perks and privileges. Political postings and transfers were unknown. Networks concluded that the bane of society, rent seeking, was linked with state patronage. Land was the original basis of it all. Its distribution, use and feudal stranglehold on agriculture and centralised control of cities stunted creativity and growth.
Similarly, industry was dependent on state concessions rather than enterprise. Sugar, cotton, fertilisers and cement, the main industries of the country, were all incentivised by the state. They were adopters, but not learners. Pangs of infanticide continued decades after the birth. Networks found mercantilism in the garb of industrialism holding the society back. Domestic commerce was never part of the thinking. The economy became more informal than formal. The networks promoted autonomous, vibrant cities as centres of growth and commerce, creating room for economic activity rather than privileged realties.
The networks’ influence finally leads to – and here Haque could not avoid a donor-peddled idea – an inclusive society. The elements of this society emphasised systems not sectors, taxing inheritance not everything else, entrepreneurship not patronage, opportunity not counting the poor, taming the automobiles to make space for the poor, demand rather than supply of education and a caring social policy. The network’s thinking was so powerful that women were “finally included” and the community came into its own.
The resulting change was deep, with a sustained double-digit growth and a new middle class assuming the centre stage. The government worked for the people and regulation was “a serious (not bureaucratic) business”. The new macro framework was based on fiscal responsibility and a simplified tax code with minimum and uniform tariffs. The State Bank began to assert its autonomy and a statutory body of independent experts, called Growth Commission, kept the Parliament abreast of the latest on growth, jobs and reform on a quarterly basis.
Haque writes just like he talks – crisp, a touch of humour as well as tinge of sarcasm with short phrases summing up long anecdotes. That makes it an enjoyable read. Somewhat technical boxes do interrupt the narrative for the lay reader, but not to the extent of making them miss the point.
There is a lot that one can find fault with. An unquestioning faith in the market is one. Whether cities are a development phenomenon is another. Like anyone else, Haque is entitled to his dreams. For me, dreaming and talking with him was fun, in fact, a lot of fun. Whether he succeeds in walking the talk is another matter. But the question of “How” does not fascinate him as much as it does the ordinary Pakistani. There can be no disagreement with him when he talks about an “owned change agenda” that is “domestically researched” in a “bottom up” debate.
Author: Nadeem Ul Haque