In the background of the good news that the textile sector did well, though largely due to an increase in prices in the EU market, farmers are out on the road to protest against the decision to impose GST on certain products used as inputs in the agriculture economy.
The agricultural economy generates employment in rural areas and in smaller towns and this it does in a manner that cannot be fully documented. Grains, cotton and other produce is sold in the market in a relatively competitive way. Even the G-20 is concerned and somewhat worried about monetisation of agricultural produce in the larger framework of their financial markets. Industrialised countries, too, took considerable time in history to come to terms and adjust their agricultural economies with the prescribed goals of industrial growth.
Pakistan has had a checkered history of economic development. The first five year plan did achieve its targets and it did so without incurring foreign debt. The textile sector, however, expanded remarkably to a good size in the sixties, but this was achieved with the assistance of loans funded by international finance agencies.
The socio-economic dialogue hovered somewhere above in the midst of all misgivings amongst different sectors of economic, social and administrative players. The basic-democracy of the Ayub Khan’s era was not intended to empower the eighty-thousand-electorate members (later increased to one hundred and twenty thousand), who were only needed to usher in the president and the national legislature. Nevertheless, the middle-income group did have their first taste of sharing, though quite minimally, the fruits of power. Both, in the East and the West Wings, there was a feeling and desire in the air to a see a greater transfer of power to the people.
Provision and manner of welfare services varies from state to state. The 1970 elections are remembered for being totally free and fair. The parties had contested on a mandate promising to bring economic reforms. ZAB and his party remained committed to its manifesto. Banks and some other key industries were nationalised. Though nearly all of these ‘reforms’ were reversed in the years to come but the experience was remembered for not having very positive effects on the economy. Growth of the industrial sector badly suffered and the enlargement of the public sector rendered itself not only unprofitable but mostly unmanageable and inefficient. The enterprises previously in the public sector suffered even a greater damage as the burden of managing the newly nationalised enterprises was far too great and cumbersome. Privatisation of financial institutions and some other industries has been achieved. Any further privatisation at this stage must be carefully thought of but definitely not before the gains so far have been well consolidated. This is going to take some time. However, there was a positive aspect of an experience gained from this episode when some sections of political circles began dealing with and politicking in real and live issues. But still, lessons learnt in the ‘60s and ‘70s were not put to much use. Two long dictatorial regimes (Zia’s and Musharraf’s) and four successively elected governments remained mired in the internecine struggle for power.
From 1947 to 1970 there was this hotchpotch of political and constitutional engineering. A sudden onslaught of populist politics took opponents by surprise. In real democracies, the concept and practice of adopting an economic reform agenda towards resolving economic issues had developed. Years of the late sixties were the take-off point when the politicking did begin to speak of issues that concerned real people and their economic problems.
The agricultural and the industrial sectors of economy must be very comfortable with each other. In real analysis, they are both a concomitant part of a working system in the market. Their interdependence is far greater than one can possibly imagine. Business partnerships on a much smaller scale, but on shared interests, are formed and they prosper. This harmonious inter-action and its realisation by the respective groups is a sine qua non for the economy to achieve its desired results. The economic sensitivity aspect of this engine of growth in a free market economy is, and should be, a self-regulating and a self-directing mechanism.
The writer has served as consultant to the United Nations and other developing economies on issues relating to trade and development. He can be reached at [email protected]
