There is definitely a silver lining to the cloud. The turmoil in the indigenous economy is dually reflected by the turmoil in the international economy at this juncture. Joseph Schumpeter made a sharp observation about the Austrian economy post-World War 1. During the period of inflation the coffee shops around the corner began to disappear and a greater number of business houses emerged to take stock of the situation. Once the inflation had been tackled to a manageable level the coffee shops began to replace the excessive number of entities engaged in the financial sector. The economic experts learned some valuable lessons about the performance of an economy.
Times are different but the economic parameters have only changed a little. To take an example; the rail network in the country has dwindled to performing the commercial side of transporting the goods to and from the ports only. But the tea stalls on the railway platforms are nearly out of business. Despite energy shortages and other problems of the economy, the exports and large scale manufacturing in the country showed a reasonable growth during the last fiscal year. The statement of the railway minister that Afghanistan and Saudi Arabia do not have a rail system was astonishing. The relevant quarters failed to update the honourable minister that Saudi Arabia has just entered into a twelve years contract with a Saudi-Spanish Consortium for the Haramain High speed Railway between Makah and Medina. About the Afghanistan economy the less said the better. The railways had been nearly totally neglected in the US but after the oil crisis of the seventies it was realised that it is the most economical way of carrying passengers or goods and accordingly they revived their network.
In 1947 the only commercial economic activity working on corporate principles of running a business, was the railway network. The Moghulpura workshop made the whole system operate smoothly. This network of infrastructure linked the various towns of the country, transporting people and precious cargo of agriculture produce and other industrial goods. In the last twenty years the economy has been expanding with a meaningful growth. The gradual building up of a corporate sector had begun to yield some dividends and showing the plausible signs of an economy moving up.
The macro and micro side of economic considerations do at times come to face each other at certain crossroads but that is when the skills of governance come forward. The neo-classical model of economy is somewhat different from the planned system of economy. The entrepreneur is required to borrow or raise capital to do business in a market based economy. To have an effective control of the economic environment the entrepreneur employs different tools but a meaningful cooperation of the state and its institutions is equally important to further the ends of an economic system desired and geared towards facilitating and running of a healthy economy.
The financial market here has not yet reached a stage where endless borrowing and debts in the shape of sub-primes could have done damage the way the economies in the developed world have been affected. The developing economies need to tread carefully and avoid the pitfalls the developed economies have been stuck into. The chaotic turmoil in the world economy is sure to alter the balance in some way or the other. Let us hope we are prepared for that. In the meanwhile, please ensure as early as possible that the business of provision of fresh cup of tea at the railway platforms begins to prosper again. The wheels of economy must keep moving.
The writer has served as consultant to the United Nations and other developing economies on the issues of trade and development and can be reached at [email protected]
