Institute of Business Administration Director and Dean and State Bank of Pakistan former Governor Dr Ishrat Husain held a talk at the Centre for Governance and Policy, Information Technology University about his seminal work on Pakistan as an elitist economy.
At the outset, Dr Husain lamented the fact that after nearly fifteen years since the publication of his book, nothing really has changed on the ground.
Dr Hussain started his talk by identifying two important elements to the working of the economy: State and Market. He said that the state and the market lead to social change.
“Though the former is important in allocating resources but the state has to ensure that markets work without imperfections and that distribution is equitable,” he elaborated.
“You must have assets to generate wealth,” Dr Hussain accentuated upon the need to have factors of production at the economy’s disposal to initiate growth.
He argued that since elites have captured the market and the state in Pakistan, it has resulted in the “creation of vicious cycle of inefficiency and inequitable distribution of wealth.”
Spending some time on how to make growth inclusive, Dr Hussain repudiated socialism and argued that “the state has no business being in business.”
He emphasised the importance of privatisation and took the example of the banking sector where twenty years ago it was mainly government led and inefficient, but today is mainly private sector led and thriving.
Dr Husain did, however, note that the government should be responsible for providing basic services to the people like education, health, access to safe drinking water etc.
“But this does not mean that the private sector cannot partner with the state in providing such basic services,” he add.
For example, the state can give vouchers for education to poor students to study at either public or private schools, he said, adding that this will ensure better schooling rates and an increase in literacy.