Monday, September 3, 2012

Economic Myths & Our Elite

Came across an interesting read on Pakistan's economy written by eminent economist S Akbar Zaidi in Daily Dawn. Its  must read for all......

THE more one talks to Pakistan’s educated elite, the more one realises just how uneducated it is about many things, especially Pakistan’s economy. This is partly not their fault, for many economists are equally uneducated about many factors which affect Pakistan’s economy, an area in which they ought to have some competence and understanding.

Moreover, with the wild, unadulterated web, everyone is free to voice their unwanted, unsolicited opinions. While such wide public spaces have helped democratise the public sphere, both print and especially electronic, so that anyone can say anything they want, unsubstantiated opinions have also undermined reflection, scholarship and knowledge about numerous concepts and issues, creating misunderstandings about Pakistan’s economy.

Economists are singularly to blame and not just for perpetrating uninformed myths about Pakistan’s economy. Those who are competent and qualified — and there are some — are too busy consulting for donors to volunteer to engage in the public sphere. Some even feel that there is little point in doing so since their views and opinions ‘don’t really matter’, and no one reads them.

Perhaps not, but there is still a responsibility on the part of those who are more knowledgeable — in any discipline — to convey and bring their knowledge to the public sphere, and whether they are read or not, is less relevant.

Importantly, more scholarly and learned interventions would replace much of the gibberish which substitutes for analysis on opinion pages. With Western journalists quoting Pakistani Op-Ed contributors whenever convenient, perhaps a more substantive analysis in the first place, would help them understand far better than the conversations they reproduce from the drawing rooms and the watering holes of the elite on which they thrive.

This absence of scholarly engagement results in numerous myths about Pakistan’s economy which become part of the general conversation, and then of conventional wisdom. One can list any number of such misperceptions, but perhaps a handful will emphasise the point.

It is not the fast-moving consumer goods, the Engros and the Habib Banks, or Pepsi or Unilever or ICI, which drive Pakistan’s industry, as so many of the elite who work for them falsely believe. Instead, Pakistan’s industrial force and its economy are based on the dynamic and creative small-scale or informal sector.

Research at LUMS has shown that this sector constitutes as much as 90 per cent of economic establishments, 30 per cent of GDP and 25 per cent of export earnings, and employs 78 per cent of the non-agricultural labour force of Pakistan.

These 3.3 million small- and medium-sized establishments are highly labour-intensive in comparison with the large-scale manufacturing sector, and around 95 per cent employ less than five workers. The backbone of Pakistan’s economy is its informal, small-scale sector, for which policy is seldom designed.

A second myth repeated ad nauseam is that Pakistan is predominantly rural and is an ‘agricultural country’. Research by Reza Ali showed as long ago as 1998 when the last census was held, that Pakistan was almost half urban and half rural, using more productive and useful definitions of ‘urban’, and not the moribund definitions proposed by the Census Organisation.

Fifteen years later, although research awaits the next census, it is not possible to call Pakistan a ‘rural’ country by any stretch of the imagination. If anything, probably 60 or 70 per cent of the people in Pakistan reside in areas one should call urban.

Furthermore, with integrated communication services and linkages, the idea of a ‘rural’ and ‘urban’ divide is increasingly redundant, and one ought to consider settlements and habitation on a continuum.

Since Pakistan is primarily urban, it is also no longer agricultural in terms of the contribution to the economy to which agriculture contributes only one-fifth. However, agriculture is still the main form of employment for Pakistani labour — around 45 per cent of the workforce.

Nevertheless, in areas which are designated by the government as ‘rural’, the non-agricultural sector generates nearly 60 per cent of the total income. Hence, even in ‘rural’ areas, economic activity other than agriculture provides a greater share of income than does agricultural activity.

One might just add in passing that Pakistan — its economy, its agriculture and its relations of production — is not feudal, no matter how often one repeats the claim that it is. At least on this one count, many social scientists are grudgingly coming around, although since many Western journalists only meet such ‘feudals’, they still write mainly about ‘feudal’ Pakistan.

Many liberal members of the Pakistani elite argue for a reduction in the military budget, believing that this will lead to a resultant rise in social-sector spending. One look at the data will show that both have fallen over the last decade.

Yet another particularly pervasive and persistent myth amongst Pakistan’s elite is that US aid to Pakistan is ‘good for the country’, when academic research has shown consistently that nothing could be farther from the truth.

There are numerous other such false hopes which Pakistan’s elite invests in, some of which are translated into government policy. Nevertheless, perception matters perhaps more than reality. If people believe something, they act on the basis of that false knowledge and understanding. Many explanations as to why Pakistan is in such dire straits rest at the doorstep of

Pakistan’s literate, though highly uneducated, elite.

The writer is a political economist.

Sunday, April 22, 2012

Bhoja Air Crash & Chaotic Reaction

Tragic Bhoja Air crash perished 127 precious lives; it has hardly been one year to horrific Air Blue crash in Islamabad.

Lately there was tsunami, killing thousands in Japan and everyone talked about the patience and civilized behavior of Japanese people. If I look at Bhoja Air crash or any other tragedy in Pakistan, our response is poor and chaotic.

Japan’s mainland security force played pivotal role in disaster management, we did not see single relief goods truck carrying such slogans “Relief Goods; A Gift for Japanese People from Mainland Security Force”.

Let us look at events aftermath of Bhoja Air tragedy;
  1. Media playing role of aviation expert
  2. Media showing wreckage and human bodies wrapped on the ground, showing insensitivity and  voyeurism
  3. Someone blaming Zardari other saying Nawaz gave initial NOC to Bhoja to operate
  4. Someone blaming Civil Aviation others blaming aging plane
  5. Rehman Malik believe there might had been foreign conspiracy
  6. Some are saying radar system did not direct well others are blaming weather
I recall during my stay in US, I took flight from Newark to North Carolina. Another plane took off at the same time and crashed. The other plane in New york landed in Hudson Bay. Aviation disasters happen all around the world.

Globally over 23 plane crashed last year and every year accidents occur. All over the world people do not come up with blame game and conspiracy theories rather investigate and wait for findings. Every time after investigation findings aviation industry learns and makes corrective measures instead of making hue and cry in a chaotic way. Nations behave, crowd makes hullabaloo.

It is high time for Pakistani media and public to learn from others and show some patience. Be it democracy , any disaster or an accident.

Monday, April 2, 2012

‘Pakistan Becoming a Dumping Ground for Hazardous Plastic Waste”

It was 1998; Greenpeace activists from all over the Netherlands & Germany closed down PVC scrap exporting company in Lelstad, in the Netherlands. Greenpeace activists blocked the entrance of the company and urged Dutch government to ‘stop export of PVC waste’. Greenpeace believed that Dutch Government was party to poisoning of workers and the environment and this behavior was shameful and tends to undermine the Dutch government's commitment in international negotiations to stop the export of hazardous waste to developing countries.

It is sad to see developed countries keeping their house clean, whereas treating third world countries including Pakistan as their waste yard.

I am glad to see Pakistani media playing an effective role of a whistle blower against the import of hazardous plastic waste in the country, it is high time for government to take strong action before it is too late.

Credit mainly goes to Daily Dawn for writing following editorial on Hazardous waste on 31st March 2012.

“ONE of the negative fallouts of globalisation has been the fact that developed countries have solved the problem of hazardous waste by shipping it to less-developed nations. Pakistan has not escaped this phenomenon. As published by this paper, the customs authorities have allowed the import of hazardous medical waste under the cover of ‘plastic scrap’. This appears to be a violation not only of local regulations, but also of the Basel Convention, the international treaty — which Pakistan has signed — designed to prevent the transfer of hazardous material across borders. Before the treaty was drawn up in the late 1980s, it was relatively common for industrialised nations to rid themselves of their dangerous waste by dumping it in developing nations; the former had tended to have passed tougher environmental laws whereas the regulatory framework in the developing world was (and in many cases, remains) quite lax. The waste in question, originally from the UK, was stored in various Lahore warehouses to be sold as scrap and includes non-sterilised drips, urine bags and vials.

As it is, there is no systematic method of medical waste management in Pakistan. Not all medical facilities have incinerators and it is not uncommon to find possibly contaminated waste in open trash heaps. The last thing we need is hazardous waste from other countries adding to the problem, especially when this waste can be infected and cause diseases such as hepatitis and AIDS. Pakistan is also a dumping ground for computer or e-waste. The improper handling of e-waste can harm the health of workers sorting it while dumping computer hardware in landfills contaminates the soil and groundwater. In the public interest, parliament and the Supreme Court need to step in to stop such unscrupulous practices which can play havoc with people’s health as well as contribute to environmental degradation. All import of hazardous medical and e-waste must be blocked while the authorities also need to ensure that all public and private-sector hospitals dispose of their waste in a proper manner. The sensitisation of health workers is essential for this. Pakistan has enough health and environmental problems of its own. Importing other people’s waste is something we can definitely do without”.

To fulfill its responsibility our electronic media is also on forefront, Dunya Tv shared an interesting report.