Why we must make economics more relevant
As a career macroeconomist, I have a huge interest in seeing that Pakistan’s economy works not just for the prosperous but also for the poorest of the poor. A key element preventing this from happening is a lack of understanding among the public at large about economics as a discipline and how it can work for them and their welfare. Unfortunately, many find acquiring a basic understanding of economics too boring, so do not even make an effort.
This is perhaps not just specific to Pakistan and may be the case in most developing countries. Most would talk about the economy in a casual chat but would never take it too seriously. The real-life questions of how this year’s currency devaluation and inflation would hurt the welfare of our households and productivity are rarely discussed in our living rooms. The lack of energy supply or the rising prices of electricity and gas rarely become a subject interesting enough to force policy-makers to change their stance in favor of timely reforms. The demand for economic accountability remains weak, so the bottom line is that most of us don’t take the economy personally.
Over the years, I have begged private television channels to devote more prime time to discussions around the economy, entrepreneurship for women and the youth, and debates around structural reforms in tax and the energy sector. Unfortunately, most media outlets inform me that discussing the economy doesn’t give them good Television Rating Points — a measure aimed at judging the performance of programs and those conducting these shows.
Another reason for the lack of interest in economic discourse may be the choice of language, which is less understood by common people. In most developing countries that are part of the British Commonwealth, economics remains a subject only ever discussed by the English-speaking elite. For example, in Pakistan more than 90 percent of the population reads Urdu-language newspapers; however, the media teams managing news and views in Urdu are least interested in publishing content on the economy and business.
A related point is to make the discipline of everyday economics a priority for our children in school — perhaps just like mathematics, languages and science. Even beyond schools, we need to see how discussions around the economy, personal consumption and savings can become living room talk. How do we ensure that our kids start talking to us about not having adequate space for physical activity and sports; about taxes being high on mobile data services, which they use for mobile gaming; and about their Facebook and related social media hobbies becoming more expensive?
I see all this as extremely relevant to my country, which continues to experience boom-bust cycles of economic growth — struggling to drive and sustain momentum in agriculture, manufacturing and services sectors. More importantly, Pakistanis need to understand that a peaceful tomorrow inside and outside the country is contingent upon the economy and jobs.
Pakistanis need to understand that a peaceful tomorrow inside and outside the country is contingent upon the economy and jobs.
Dr. Vaqar Ahmed
The China-Pakistan Economic Corridor project has provided a new narrative for Pakistan's economy. The country has seen a surge in its growth numbers during the recent past, which in turn has led to a revival of business confidence. However, apprehensions regarding the sustainability of economic success arise due to an increased import bill and rising public and private consumption, which in turn increases the government’s appetite for foreign borrowing. With global oil prices on the rise and Pakistan’s continued reliance on imported energy sources, this is certainly not good news. There are strong voices informing the government to resort to assistance from the International Monetary Fund sooner rather than later.
For a very long time, independent economists continued to remind the government that sustaining security, law and order-related and economic gains would require removing the impediments to growth of small and medium enterprises and bringing down the cost of doing business. Second, equally important is to address the growing undocumented sector of the economy and lure this wealth into the formal sector. Third, addressing weaknesses in public expenditure management can enhance the efficiency of social and welfare spending and give greater value for public money.
A failure to take collective responsibility for the above mentioned reforms has resulted in mounting losses and debts for some very large public sector enterprises, like Pakistan International Airlines, Pakistan Railways, Pakistan Steel Mills, and energy sector generation and distribution companies. These entities are creating losses that ultimately hurt the common man on a daily basis. Yet there is no urgency for reform as public pressure never heats up to a level where politicians and public servants feel obliged to change the status quo.
• Dr. Vaqar Ahmed is Joint Executive Director, Sustainable Development Policy Institute, Pakistan (SDPI). His book “Pakistan’s Agenda for Economic Reforms” was recently published by the Oxford University Press. Twitter: @vaqarahmed
