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Pakistan's economy rigged by small elite group: Ishrat

SHAHID IQBAL

KARACHI: It is not the market-based economy in Pakistan. It is monopoly, rigged by a small elite group," observed the new Governor of State Bank, Dr. Ishrat Husain, at a seminar held on Saturday.

The Pakistan Institute of International Affairs organised the seminar on "Managing Pakistan's Present Economy: International Obligations Vs Internal Compulsion" which was also addressed by Shahid Javed Burki, a former Vice-President of World Bank.

Before starting his short speech, Dr Ishrat Husain made it clear that he was not speaking as the SBP governor but as a student of international affairs.

He appreciated the Chinese economic reforms and termed them as role model for him.

"We have two choices: either to face the globalisation, or isolate and try to become self-reliant," Ishrat said.

He explained the phenomenon of isolation with reference of the Chinese economy before 1978 when China opened up its doors for market-based economy.

"Poverty in China was 40 percent before introduction of economic reforms but it came down to eight percent only. The per capita income doubled after each decade for the last three decades that is a record," said Dr Ishrat.

He was of the view that Pakistanis should stop blaming everybody for the failure of political and economic system.

It was better to accept the responsibility, he said, and suggested to follow the Chinese model with strict discipline, dedication and honesty.

"The only way to eliminate poverty is the coordinated effort of the government and the private sector. No government can do it alone, every person should be involved to eliminate the poverty," he added.

He said the challenges of the 21st century might only be fought with power of knowledge and skills. "The education and skills should not remain for the elite class coming out from Atichison, (College) Karachi Grammar (School) and LUMS. It must be for the masses," he remarked.

He said that the elite class had hijacked the country.

Earlier, Shahid Barki gave an overview of the economy citing a bleak picture of the future "if we are not ready to sacrifice to build the economy."

He said: "We are facing the most difficult time of hour history. Our institutions have collapsed. We need urgent and quick decision and determination to cope with the poverty problem.

By the year 2010, the population of the country will be 170 million and "80 million will remain below the poverty level," Burki said.

He said he was concerned over the low rate of saving and destroyed infrastructure developed by the British government. Most of the institutions are on the verge of the collapse. Banking system is heavily burdened with bad portfolio. He said inefficiency all around.

He suggested a number of measures for the betterment of political, social and economic structure of the country.

Talking about external obligation, he said he did not see any option for Pakistan except to accept the obligations, which are in accordance with the agreements signed by Pakistan with various countries and donor agencies.

He was highly critical of the way Pakistan handled the IPPs issue. "India had the same problem but they (Indians) used their wisdom. They sat with them and negotiated new agreements instead of waging war like Pakistan," he said.

He expressed his opinion against the domination of one province or one class. He supported restructuring of power structure in the country and suggested devolution of power to the lower level.

He expressed disappointment that the Chief Executive, Gen. Pervez Musharraf, did not say a single word for the education in his speech about the economic reforms.

He said he firmly believed that without education and skilled workers Pakistan can not fight the challenges of the 21st century.

"Out of 150,000 US visa to import high-tech workers in information technology, India received 76,000 visas while Pakistan could get only 2300," Burki said.

He gave prime importance to irrigation and transportation in Pakistan, and suggested right-sizing of the government machinery and privatisation of the assets.

According to his estimate, Pakistan could get 10 to 15 billion dollars from the privatisation of its assets.

He said that 3.5 to 4 million Pakistanis are working abroad and their total income is equal to Pakistan GDP. "They will come happily to invest but an environment is needed to be created for them. Their investment and earnings should be protected. They can do as the overseas Chinese did for their country," Burki remarked.