COMMENT: The ‘failed state’ bogey —Munir Attaullah - Wednesday, February 09, 2011

Source : www.dailytimes.com

The current public mood of despondency and disenchantment is not in dispute. That sense of disillusionment is sharpened by our largely sensationalist and superficial electronic media, for most people accept what it says at face value

Last week, I argued we were far from a ‘failed’ (or, a ‘failing’) state, though it would be a serious folly to be unconcerned with the rocky and potholed road ahead we must travel. Conversely, it is a mistake to judge the picture standing too close to it, as is being done by many a TV pundit. Sticking with the theme, this week let me add some additional flesh to the rational argument for optimism.

Central to the rational argument are two key factual realities that cannot be ignored (but usually are) when discussing this matter. Always keep in mind we are a third-world country, and will remain so for much time to come, irrespective of our desires. And never forget the heavy and cumbersome baggage we presently carry from three decades and more of ideological follies and lack of investment in key public sectors.

We cannot simply wish away these realities. Therefore, it is pointless in a sense to moan about our many present shortcomings, or expect too much too soon. Let us not be like the Irish farmer who, when asked by a tourist lost in the countryside, the way to Dublin, scratched his head thoughtfully and eventually replied, “Laddie, if I was going to Dublin I would not start from here.”

That means, the only proper subjects for sensible debate are — keeping the historical constraints we are saddled with, always in mind — the general direction in which we are headed, whether our priorities are the right ones, and the rate at which we are making progress with such an agenda. No fantasies and no absolutes, please. And no false comparisons either. A realistic calibration is a must.

But first we need to have a clear idea of the major issues that confront us. So here is my personal list of the four most significant issues (neither exhaustive, nor presented in any particular order of importance because, in the complex modern world, major issues tend to be organically inter-linked and inter-dependent).

One: the economy, and the need to restructure it to achieve meaningful rates of sustainable growth. Two: progressively resuscitating and giving life-sustaining strength to nascent democratic structures and the many decrepit, crumbling, institutions of the state. Three: getting to grips, by re-defining our security paradigms, with that thorny porcupine-like trio of inter-linked issues of religious extremism, international jihad, and the role of our army in our national affairs. Four: in the global village, taking the needed steps to fully reintegrate with the international community.

Sure, there are many amongst us who will vehemently disagree with my agenda or parts of it. There are those who believe our first priority should be to make Pakistan a citadel of ‘true’ Islam; for once that happens the rest will automatically all fall in place, and all our problems will be over. Even more fancifully, others want to unite the Ummah, and use Arab oil wealth coupled with our army and our ‘bomb’, to wage international jihad against Europe and the US until Muslims regain their past glories, and are given their rightful place at the high table. Still others believe we should send the IMF and the US packing, for we do not need them because, actually, we are a very wealthy, resource-rich nation that only needs to get its act together.

As it is impossible to argue rationally with this lot, I will not. So let me simply get back to my agenda, and apply the thinking I suggested earlier to the question of the general direction in which we are headed, in relation to that agenda. But I cannot do full justice to this vast and complex subject in one short column. So I will restrict myself today to some cursory observations on the economy, hoping that readers will similarly apply their own critical faculties to the other parts of my agenda in the light of my brief overall comments of last week.

Much is made of our current economic woes, and there is no denying we have some serious structural problems that need urgent attention. The biggest problem is that the finances of the government, for various reasons — not the least being defence and security costs — are in a mess: there is a fearful mismatch between its resources and expenditure. And this awesome gap can never be bridged by cuts in government extravagance (the populist demand). The real and obvious answers are widening the tax net, cutting subsidies, and stemming the red ink in the state enterprises, in a growing economy.

I am not claiming we have developed the necessary political will to forcefully proceed with this whole reform agenda in double-quick time. Democracies (and remember we are a third-world democracy) move slowly. But let us not deny either the heartening consensus developing in the political class and the responsible media (which will soon filter down to the public) that such initiatives are now inescapable and inevitable. The tax base is widening every year (albeit slowly); the trading community, the service sector, and even the agricultural sector, cannot now for much longer get away without paying some (if not their due share of) taxes; and the actions of the Supreme Court and the opposition (to this government or successive ones) will be powerful levers of pressure (not to mention the IMF and donors) on this and future governments to act on revenue leakages and public sector losses.

The current public mood of despondency and disenchantment is not in dispute. That sense of disillusionment is sharpened by our largely sensationalist and superficial electronic media, for most people accept what it says at face value. Sure, it is the job and duty of the media to highlight what is wrong. But how often does it take the trouble to put its stories in a wider context?

Consider food inflation that has badly dented the pockets of the urban population. It may of course be no consolation to those affected, but is it totally irrelevant that this is a worldwide phenomenon that no government has managed to control (the average being a nearly 30 percent hike globally)?

Or, take the issue of poverty. We are told it has reached alarming proportions and is increasing rapidly. But wait a minute! Is most of our population not rural? And has the recent rapid rise in commodity prices not transferred some Rs 400 billion of extra income to the agricultural sector? Yes, the urban population has suffered correspondingly, and perhaps the big landlords and middle-men have siphoned off most of that windfall, but surely some benefits must have accrued to the rural poor?

Or take the issue of our hordes of unemployed educated youth. Is that entirely the fault of our uncaring, incompetent, corrupt government? Can we realistically ever hope to make a significant dent into, let alone solve, this problem in the near future, through a ‘revolution’ or otherwise?

Consider this: Egypt and Tunisia (where, according to some analysts, it was the frustration of the unemployed youth that produced the current upheavals) enjoy income levels between five and ten times that of Pakistan, but had no answer to the alleged problem. And, currently, even in the US some 37 percent of 18-29 year-olds are without jobs. Again, unemployment is a worldwide phenomenon, waiting for another Keynes for a solution to this riddle even as trillions of dollars of capital in the shape of hot money feverishly flits globally in search of profit.

So, even though I see the communication revolution as the supreme catalyst for the many changes that have long eluded us, let us not at the same time allow it to overwhelm us with its in-built propensity to convey the immediate but often superficial message. Buckle-up for the long-term, I say.

The writer is a businessman. A selection of his columns is now available in book form. Visit munirattaullah.com