The authors of Why Nations Fail, Daron Acemoglu and James A. Robinson, make clear that a nation’s prosperity is not dependent on aid from abroad in their book. The authors contend that no amount of donations, aid or other financial support can maintain a nation, much less reform it. Of course, there are further variables as well, such as an inclusive system that serves as the cornerstone for every country’s development regardless of location, as well as other ideas that the authors have disproved one at a time. The book, in an interesting way, demonstrates how one thing may lead to another; for example, an exclusive system might lead to dependency, whereas an inclusive system can lead to wealth, independence, and general well-being for all.
The true nature of the situation may be grasped by reading the entire book from a Pakistani viewpoint. In terms of reliance, financial dependency is among the most gravely problematic problems. Foreign aid has been supporting Pakistan’s economy since the 1970s. Dollars fed the troops and mosques in Afghanistan when the Jihad was raging. This country went to the birds economically and socially after the end of the (un)holy war, co-opted by unholy men.
When this nation proclaimed itself a nuclear power in 1998, sanctions followed in a corollary that only grew worse. Thanks to the 9/11 tragedy and the ensuing War on—or more appropriately, War on—Terror, the USA once again began to rake in cash with the rise of the last tyrant. The USA was kind when the Army was in charge of Pakistan, but the civilian administrations didn’t get along well with Uncle Sam. It communicates volumes by itself.
Pakistan appears to be suffering from a type of dependency disease that has permeated the nation’s core foundations, particularly economically. No nation can perform better on any front if it is not on solid ground. The USA repeatedly used Pakistan for its national objectives during the SEATO and CENTO, the Afghan War, and the War on Terror. Surprisingly, they both had a high level of mistrust for one another, yet, on the other hand, they were so dependent on one another that it was nearly impossible to ignore the other. In other words, despite having deep mistrust and scepticism towards one another, Pakistan and the USA were like those unhappy couples who were destined to be together.
There are several factors at play in Pakistan’s economy’s poor status. First of all, important problems go unaddressed, worsening over time. For instance, we don’t have a land tax, and tiny firms aren’t registered or digitalized, which promotes rent-seeking and jeopardises the nation’s economic stability. As a result, businessmen’s minds seem to be infused with real estate. Despite the country pleading with foreign lenders for merely $1.3 billion, other publications claim that the real estate is worth up to $400 billion overall.
Real estate, which is incredibly unproductive, untaxed, and dependent on increased imports, has replaced investments in industries focused on exports as a popular place to spend money. China wouldn’t have imposed such rigorous regulations on this industry if it had offered any benefits. It also receives the majority of black money, making it little more than a tax-free sanctuary for the ultra-rich at the expense of the underprivileged.
Without a doubt, the founding of Pakistan marked the beginning of elite capture. This extreme minority has held politics captive for their gain. While on the surface, they appear to care for the nation, or at least they claim to. The truth is that they simply come here to dominate or to profit, and when their task is accomplished, they abandon this nation to the wolves. Look at all of our current imported politicians, including those in the PTI and those in power, as well as their relatives who aren’t also in politics.
Politics and the economy being interwoven is another unsettling aspect of the scenario. A Pakistani youth from the middle class may be anything but a politician. Why? Politicians create policies, which are then adopted by everyone else. In a sense, less than 1,000 people decide the fate of 230 million people. Even worse, all of these electable members—with a few notable exceptions—were born with a silver spoon in their mouths. The fact that another individual who has no experience with that life and has never lived in poverty is portraying a street person suggests more than simply that the system is fundamentally unfair. This nation’s potential, progress, and prosperity are stolen by this elusive economic and political system.
Furthermore, the exclusive system splits society into several parts, leaving the majority vulnerable to wolves. The rich don’t bother with public services such as public hospitals, schools, and others since they have created a substitute system for their families: Bahria Towns, an O- and A-Level educational system, private hospitals, and enormous shopping malls stocked with imported products. Public institutions thus endure a considerable amount of carelessness. Heavy costs and ongoing economic uncertainty are left to the mercy of those who cannot pay them.
To no avail. Economists inform us of a variety of deficits and provide us with a list of causes and solutions. But they leave out the most important detail—the actual cause—which is the one that should be mentioned. Rich youngsters, for instance, love their iPhones, which they replace every year; take advantage of imported automobiles, and cannot stress enough how dependent they are on branded clothing. Their parents could own substantial real estate holdings, and farmland, or work in the government. They make money from this nation, but they don’t trust its goods, so they constantly import. Dollars leave the country as a result, and import costs soar to the heavens. Thanks to our elite, no less than $8 billion was wasted this year alone on the import of non-essential products.
The government’s turning to the IMF for a rescue package is another issue. Only after the former gives the go-ahead to drop the bombs of inflation, taxes, and an increase in the cost of living on regular people, does the latter agree to assist. Unless elections are approaching, the tale is repeated. Since every government has used it without incident since the 1970s, this tried-and-true method is not only straightforward but also practical. In a way, much more like other things, the poor in this region of purity make up for the luxury of the affluent.
If the elite implements these measures, this unfair order of affairs may function for a short period before destroying the entire nation. However, even though the impoverished are available to our governing class, both military and civilian, nations like India and Bangladesh have learnt this straightforward lesson decades ago. It’s time for our nation’s leaders to come up with a strategy for inclusive growth so that one day we may have a progressive, advanced, and contemporary nation.
