Matrix Report
Haroon Sharif – Former Minister of State and Chairman Board of Investment, Pakistan
The elephant in the room is the rising trust deficit between the state and the citizens due to continuation of a “patronage-based alliance between a weak political elite and an incapable civil service”. This system has paved the way for a classic elite capture by crony business dealmakers who exercise mass influence on public policy. This pattern leads to mutual dependency, populism, marginalization of the poor, and shrinks the space for professional thinking.
For example, the Pakistan Tehrik-e-Insaaf (PTI) government could not come up with a single growth policy during its first year and remained reactive, transaction-oriented, and unable to create space for new ideas and models of governance. Rather than challenging the colonial bureaucratic system by attracting professionals, the government continues to put more water in a chronically leaky bucket. The countries which have shown growth have invested in human capital and ensured meritocracy.
The above flawed model discourages indigenous capacity for policy-making and service delivery. After every few years, Pakistan goes for an IMF bailout to deal with fiscal imbalances and starts listening to the mantra of a mediocre multilateral financial system. A weak economic governance system suits international financial institutions who continue to use their clients for experimentation and influence domestic policies through political agendas of their shareholders. China, India, and many East Asian countries have successfully broken this vicious cycle by investing in technology, innovation, behavioral change, and meritocracy, rather than a tenure-based system.
Pakistan has consistently struggled to develop a sustainable growth strategy which could inspire confidence in the market and other key stakeholders. The patches of growth have been achieved due to transactional inflow of capital attributed to geo-political developments rather than a solid economic value proposition.
The worrisome development is that at a time when China, India, Bangladesh, and Sri Lanka are showing above 6% GDP growth, Pakistan’s growth forecast is below 3% in the next few years. In contrast to what the evidence suggests, Pakistani political elite has been made to believe that macro stabilization, social protection, and accountability will revive the economy. The political cost of moving towards demand compression, regressive taxation and compromising on merit has always been too high to sustain by any government.
Ambassador Mian Sanuallah –Former Ambassador
While perusing folk tales about Kashmir, I read about an elephant tumbling down from the top of a hill into an open area. A prince who watched the fall from a safe place laughed. The children in the room cried out of fear, with no one to rescue them. The cries and shrieks of children made the furious monster confused and it continued trampling as it searched for an escape.
In this sorrowful tale, at least the elephant had caused harm while trying to exit the room. In today’s Pakistan the elephant refuses to leave the room.
Unfortunately, the victims have lost the will to force it out; they falsely underrate their capacity to ‘fix’ the monster. As a result, all of them are pitted against each other to curry favor with the monster. The effort is to secure a safe space and make it better than the other, by any means. The proverbial elephant in the roomis the nexus between establishments, businessmen, judiciary, and politicians.
Many call it the “deep state chain”. Others call it a curse worse than corruption, a dysfunctional judiciary, lopsided accountability, or bad governance. Will this nexus persist through the current government? Most likely, it will sail through smoothly, relishing U-turns, fancy talk, tall promises and lofty claims.
So who is responsible? Is it the chief executive who has failed to deliver on his promises or the nexus that does not allow him to deliver? Public insensitivity and their loss of self-esteem are the culprits here. In developing countries, people are never empowered by the state, institutions are intentionally kept underdeveloped and the state DNA mutated to fit the needs of such nexuses.
This has happened in China, India, South Korea, Malaysia, The Philippines, Turkey, South Africa, Zimbabwe, and in Latin American countries. To a lesser degree, it still continues in developed democracies. Some of these countries have mitigated the nexus but none have eliminated it completely. In fact, wherever there is growth and spread of prosperity, partners in the nexus loop are involved in some capacity.
In their individual capacity, the establishment (civil or military), businessmen, politicians, or judiciary cannot be justly described as the elephant. The true elephant is their combined effort based on perceived common good. To a lesser degree, the public slavish mentality of following a “deng ti pao” policy, rather than a thought-out vision to regain its much touted resilience, can rightly be blamed.
Justice Manzoor Jillani – former Chief Justice Azad Kashmir Supreme Court
Security Establishment’s Role:The visible or invisible influence of the security establishment – direct or indirect military role in political governance and foreign policy – has not only distorted governance structures but also adversely affected the country’s image. A factor further aggravating the issue has been the perennial state of conflict with India, which the military has used to heavily influence the foreign policy.
Zameendari/Jageerdari System:Unlike India, which abolished jageerdari(land grant) in 1951 and zameendari(land ownership – aristocracy) by 1956, Pakistan ignored both. Pakistan was deprived of a stable political system and leadership to abolish this menace. The two groups inducted/married into influential families and institutions of the civil/military bureaucracy to protect their interests. This has negatively affected Pakistan for 72 years, and continues unabated to this day.
Additionally, pitfalls in agricultural taxes affect the overall progress of the state. This deprives the state of revenue and the landless tillers of potential benefits.
Education and Literacy:There are multi-pronged syllabi in private schools for the elite, leaving affordable state and madrassa schools for commoners, with outdated curriculum, poor staff, and facilities. They produce the bulk of semi-literate and unskilled workers in the market economy, and do not encourage critical thinking or innovation; hence the low productivity.
Foreign Policy:The general impression is that Pakistani foreign policy is driven by power blocks, be it the United States, the so called Muslim Ummah (Arab monarch states) or China, tilting its strategic and economic interests more in their favor, i.e., temporary alignment of short-term (and short-sighted) state interests. This is what Pakistan did in the case of Afghanistan and hence a chequered relationship with the United States. It has also defined and impacted our relations with India and most Western European countries. All this has had both intended and unintended consequences for the civil society and the security establishment, with a direct bearing on the economy.
The Kashmir Issue:Kashmir has weighed heavily on Pakistan’s foreign policy. Much of the strain in its relations with India stems from this dispute which defines the nature of Pakistan’s India policy even today. The support for Kashmir-focused militants has had a debilitating impact on the overall image of the country. Most of the conditions attached to the Action Plan by the Financial Action Task Force (FTAF) relate to the groups, persons, and policies that are the legacy of our declared and undeclared Kashmir policy.
The revocation of the special status of Kashmir by the Indian government on August 5 brought new pressures for Pakistan. No country is ready to annoy India by openly pleading for Kashmiris’ right of self-determination. By taking up the case for over eight million Kashmiri Muslims, Pakistan once again stands singled out for siding with what US President Trump alluded to as “radical Islamic terrorism.”
Tariq Zameer – Former Ambassador
Amongst many of Pakistan’s recurrent problems, apathyentered our pathology in the last several decades and keeps entrenching deeper. It is seen in state Institutions and citizens irrespective of rank, gender, age, or level of education. But it is especially pronounced in the youth.
Resultantly, you see a herd of over 212 million directionless humans, unaware of the malaise which affects them. Unfortunately, at state or academia level, there are no serious studies about the cause of the national indifference. This has further widened and deepened the trust deficit between the state and subjects, a hangover from our colonial past.
The failure of the judicial system, the arguable immune system of the state, has invited many opportunistic infections to attack our being. We need measured input from established sociologists/anthropologists/psychologists to advise policymakers on combating this.
As observed by Masha Lipman in 2005, “This deep alienation between people and the state is the nature of the System; or rather, the System is Nature itself. You may be afraid of the System or resent it, but unless you’re suicidal, you have to adjust, since the System will never change. So you constantly look for loopholes, you find ways to outwit, outmaneuver and beat the system: pretend, lie, cheat, steal. ‘If you want to live, learn how to hustle.’”
Anees Jillani– Supreme Court Advocate
The elephant in the room is low quality and further deteriorating human resource.
Most Pakistanis would disagree with this assessment. However, the same lot will prefer medical treatment, tourism, education for their children, and consumer products from abroad, while lamenting the state of Pakistan.
The root cause is an extremely poor education system where creativity and critical thinking is stymied. Thus the educational system is the other big elephant in the room and the reason for intellectual and economic backwardness.
Zubair Motiwala –Chairman, Pak-Afghan Joint Chamber of Commerce and Industries
The Federal Board of Revenue (FBR), formerly known as the CBR, is the big elephant in the room. The economic problems of Pakistan primarily originate from FBR which has at least 17,000 employees but 86% of the tax collection is at source. This demonstrates a huge financial burden on the national exchequer only to collect 14% revenue.
It is almost impossible to increase revenues under the current FBR operational mandate. They create hurdles for citizens at every step, obstruct, and needlessly harass. Tax offices around the world focus on tax collection and not harassment. If the FBR is shut down, and the entire tax collection system outsourced, I can guarantee that the government’s revenue would increase by 150%.
