Economics of self-respect | Sakib Sherani

The prime minister’s visit to the US in October had all the trappings of recent previous ones by Pakistani heads of state or government: colour-synced ties matching those of the US president, dozens of relatives and hangers on in tow, and a bemused, I-would-rather-be-playing-golf-than-meet-this-guy look on the host’s face.

Nonetheless, these trips are regarded as the pinnacle foreign policy achievement by our politicos, replete with photos of begum sahib, daughter and granddaughters with POTUS and the first lady. The importance attached to these trips personally by those making them was captured in a brilliantly incisive cartoon by Pakistan’s leading political satire weekly on the eve of the prime minister’s US trip. It showed a beaming prime minister atop the gangway of his plane, suitably attired for his trip – in an ahram (used for pilgrimage to the holy land.)

This trip was just one in a long line of such visits where the demeaning obsequiousness of our elites has been on full display. PPP’s Birkin-carrying foreign minister took hubby along for a photo at the White House, while Nawaz Sharif’s family had apparently carried a shopping list along on the infamous July 4, 1999 meeting with Bill Clinton, as Pakistani soldiers were dying needlessly in Kargil.

This affliction is not restricted to the civilians of course. During Gen Musharraf’s tenure, underlings from the State Department would breeze into the president’s office straight from the airport, to the chagrin of the Foreign Office. In a particularly demeaning display by one of his cabinet ministers, a freshly retired general, the gentleman was pictured nearly scraping the floor as he greeted Christina Rocca during one of her many routine visits to Islamabad. (Who was Christina Rocca, you may rightly ask?).

Apart from the obsequious demeanour, it is the things we say and ask for, and then settle upon, that is even more depressing. Unlike Turkey, which spurned a $40 billion US inducement for joining the Iraq war, we have been more than happy to sign on to highly suspect and highly intrusive US constructs such as the Kerry-Lugar bill, that too for the promise of a mere $1.5bn a year. (With a reputation for being willing to ‘sell our mothers for a dollar’, perhaps the Kerry-Lugar bill did offer a reasonably large amount for our rulers).

The finance minister in the PPP government at the time, a competent economist, pleaded for the money, going to the extent of saying that Pakistan’s economy would collapse without the funds — a hyperbolic suggestion. The president at the time had a broader vision, of course. He plainly stated that the world ‘must’ give Pakistan $100bn. The ‘or else’ was left undefined, but the ‘if you do, you know where the money will go’ part of it hardly required any elaboration or imagination.

Any interaction with the US over the last so many decades has invariably revolved around trying to extract promises of large US aid or assistance; in a sign of how the bilateral relationship has waned over the years, this demand has now watered-down to the ‘early release’ of a few hundred million in CSF monies. Irrespective of the amount, one constant remains: money has always been a large part of our expectation from the bilateral relationship.

Given this near uni-dimensional interaction, it would be instructive to put the $1bn or thereabouts that our power elites spend sleepless nights about in perspective:

Annually, the amount of tax not collected in Pakistan amounts to an estimated $10 bn at the minimum;

Every year, approximately 5pc to 7pc of GDP (around Rs2,000bn, or $20bn) is lost to corruption, by conservative estimates;

Electricity theft nationwide amounts to around $1-1.5bn a year;

The country’s exports can increase by a multiple of $1bn with policy focus and serious structural reform;

All these areas, and many others, are those that internal policies can address — provided that our power elites want to traverse the path of reform, self-respect and dignity. That is moot, since insiders with entrenched vested interests enjoying the ‘loot’ can hardly be expected to change the status quo.

The downside of this narrow-prism interaction with the US has been two-fold. First, Pakistan has ended up compromising its national interest on many an occasion – the Kerry Lugar bill being one such instance, and the externally driven agenda of unilateral trade liberalisation with India being another. (As an aside, it is ironic that the US was pushing for trade liberalisation, given how its own protectionist tendencies and the conflating of geopolitics with economics was on full display in the recently-signed Trans-Pacific Partnership trade deal).

Second, perhaps even more damaging in the long run, the availability of ‘easy money’ from external sources for a protracted period (rightly dubbed as geopolitical rents), whether through grants or loans, has served as the equivalent of our ‘Dutch disease’ and dulled the impulse of Pakistan’s power elites for meaningful home-grown economic reform.

In matters of national self-respect, Pakistanis can learn valuable lessons from tiny Cuba. The country of 11 million people stood up to the world’s superpower next door for over 50 years, without compromising its sovereignty or dignity. It did not grovel for peanuts, claiming the economy will collapse without a piddly $1bn a year. In the meantime, unlike Pakistan, Cuba devoted its energies to developing its human as well as social capital, spending up to 8.8pc of its GDP on building an enviable healthcare system, and achieving universal adult literacy (compared to 0.7pc, and 58pc respectively for Pakistan).

Not surprisingly, Cuba ranks 102 places higher than Pakistan in the UN Human Development Index.

If our elites discover self-respect, the world will respect and listen to us. Pakistan will also not require external assistance and props to ‘survive’, with the associated self-serving agendas of external actors.

Economics of self-respect | Sakib Sherani


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