Haquepresentation.pdf

Looking Back! How Pakistan became an Asian Tiger in 2050 Nadeem Ul haque http://development20.blogspot.com/ Email: [email protected] Podcast: https://nhaquepod.podbean.com Twitter: @nadeemhaque Join: https://www.facebook.com/groups/SochBichar/ World bank doing a study Pak @ 100

Content analysis 1992 • Foreign policy +security • Domestic. Speculation dynasties +civil military • Birdies and conspiracies

• Missing economics +systemic issues

What this session is about • Economics not politics • I am not negative on Pakistan. On the contrary • Fresh approach and understanding • A new way of analyzing understanding. • Not the only way. • So please let us try to discuss and stay on topic

Econ books • Boring. Impress by numbers even if wrong and meaningless. Hayek • Lengthy descriptions little analysis • Mostly donors—fiscal some social sectors lament poverty corruption and stress more taxes. • Engineering econ. Pilot FM. Puff him up strutting about

But there is better economics • Later • My purpose here offer new narrative new approach • Much can be explained if we look at pakistan through this lens rather than mere foreign policy, speculation • First joke • Then story

2050 • Pakistan PCI $12000. 20 yrs 10% growth • Booming --multinationals • Exports 45% • Middle class 90% • Govt well run budget balanced debt 20% • Tourism up globalized • Beautiful cities. Autonomous. Centers of commerce • Units for profs students. Contributing to policy • Peaceful. Modernized Terror gone

UN commission 2050 • They note in 2020 • Divided –terror and fundamentalism • Stop go development • missing youth dividend • Bad and ill thought out govt projects not leading to growth • Poor social sector performance • Ratings (competiveness, governance, EODB corruption, fragile states) paint a picture

People find a way--positive • Young population threat and opportunity • Entrepreneurship through migration and informal economy ranges between 30-80% • Remittances great equalizer • Growing middle class • Poverty declining

• Problem Policy and govt. • Volatile growth • Long run growth falling • Productivity decline

Prelude to Reform • How Policy Was Made Before 2021 – • Old model---aid—infrastructure-taxes • Fragmented Policy, • Owned by Nobody • Austerity • Talent Leaves Government In Austerity, • Thinking Shrinks First • Projects and Programs Did Not Work

Agents of change—what is your theory of change. • Top down—wishing for benevolent dictator or great leader • Here bottom up --Crowd-Sourced Agenda • Freewheeling Growth of Networks Flat Organization: • No power, No Perks • Explain Networks later • A new kind of economics complexity evolutionary.

CAS • Evolutionary—non equilibrium • Deep (model) uncertainty • Unpredictable----No targets • Policy nudges or finding attractors • Policy depends on deep knowledge and understanding

Networks emerged by 2023-5 and noted • Footprint of government =70+% • Limited investment/saving • Is govt benevolent –will do right thing—all it needs is guidance • But govt a rent distributing agency • The belief in markets • Where is competition –the success norm.

Govt no research or thought • Budget and Circular debt • Energy---Now NS asks for audit after 10 years • 1 Constitution ave and KHI buildings • Roads metros aping West • Reko Diq • Privatization

Government No Process Analysis

Research

policy Data

All outsourced to Donors

Government of day

Army

plots perks

plots perks/ DMG

control devices appointments transfers

Industry/Agri/Rich

SROs subsidies licenses

Unproductive avenues of social mobility

Crisis

Austerity

No Reform

Bailout

Fragility

Continued rent seeking bad policies

Social mobility and Incentives • No merit or competition • Dynasties in politics Cheema + Ayesha ali • Industrial structure –no entrepreneurship • Markets over or badly regulated Competition limited. CCC • SROS, cartels entry • Rentseeking—SROs, land grants, kickbacks • Then there are government contractors

Solution evolved. Debated discussed 2025-30 • 2025—reform period 2028-30 • Build State for Development (2028) • Adapt the Constitution (1935)

• More electoral competition-entry • Checks and balances

• The Role of the State—Strong and Caring • Decentralization At Last! Evolving Local Governments Islamabad has been Cut Down to Size (commission) • Developing Due-Process. (Commission)

Dispensing with the Colonial legacy (2029) • Colonial Extraction • Captured by the Elite Enter the IMF: Budgets Out of Control • Increasing Concentration of Power --ROB • Debate on Reform Flattening the Pyramid --UPS • No More Transfers! • Well Paid But With No Perks • Union Busted

Breaking the Back of Rent-Seeking • “Success Norm?” • The Problem of Land • Cities Held Hostage to the Central Bureaucracy (2030) • ‘Feudal’ Stranglehold on Agriculture • Land Markets Not ‘Land Reform’ (2029-31) • SROs and industrial estates • Neoliberal. Govt v market

Mercantilist Policies and Distorted Development (2029-31) • A Brief History of Industry • The State of Markets • Entrepreneurship and Innovation • Family Run Businesses • The Forgotten Domestic Market • The Informal Economy Grows Mercantilism Must End!

Missing: A Cauldron of Change (2029-30) • Development is a City Phenomenon • How the Cities were Managed • Giant Unmanageable Sprawls • No Room for Economic Activity or community • 90% of city space for rich in 2020 • Autonomous Vibrant Cities Required

The pernicious role of perks and plots • Unevenly distributed as performance reward • Tax free compensation • Used to game new entrants • Enclosure mentality-symbols • Put all into land development • Ruined cities

Inclusive Society • Build Systems Not Sectors • Taxing Inheritances Not Everything Else (tax reform 2027-9) • Don’t Measure the Poor, --Give Them Opportunity • Taming the Automobile and Making Space for the Poor (2026-9)

A Secular Pakistan • Cities and public places • Commerce and leisure • The Rise of a Local Public Intellectual • Regulating the Mulla. (2032)

Emergence • Entrepreneurship • Opportunity • A Better Social Policy • Education is Now in Demand • Women are Finally Included • The Forgotten Community

The Results Are Visible • A Deep Change! • Government for the People • Regulation is a Serious (Not Bureaucratic) Business • The New Macro-Framework • Booming New Markets

Lessons • Think Systems, Not Sectors • State-Building Must be a Priority • Cities are the Unit of Development • Donors Must Stand Back and Not Set the Development Agenda • ‘Best Practice’ Suppresses Local Creativity • Agents of Change Must Be Supported

What do we learn? • Avoid mimicry and external experts • Think systems and markets not sectors • Innovation, experimentation and creative destruction • Global knowledge pool, open societies but local solutions • Human interaction and network formation—social capital • Interventions--Nudges