The corrupt politicians in
Pakistan put the nation in severe economic crisis and the nation is still
looking for a growth strategy. Our Economic planners look towards the
International Monetary Fund (IMF) and other multilateral donors for guidance to
spur growth. The experiences of countries such as Brazil, China, and India can
provide alternative views about development, and these experiences may at times
be more relevant than the pathways advocated by developed countries. None of the
three countries have the ideal transparency or governance that the economists
from developed countries state vital for sustained growth. All the three
countries, though, ha
ve slightly better rating in the corruption perception index of Transparency
International. Nonetheless these countries are classified among the corrupt
nations in the world.
Not all the three have democracy. In fact, in economic freedom or in case of
doing business , India and China are rated below Pakistan by the Heritage
Foundation of United States and the World Bank.
But, these ratings look meaningless when we compare the performance of these
three countries with that of Pakistan. The major difference between these three
countries and Pakistan is that they have better institutions that may be as slow
in taking decisions as ours are in achieving quick results, but they rarely
deviate from the rules. In our case, we award contracts worth billions of rupees
without even adopting the required procedures. Our bureaucracy simply does not
implement
the policies.
They bend rules to please the political government of the time. Brazil, China
and India have not only become powerhouses in terms of population, food
production, and economic strength. Even though these three countries have
followed three significantly different development pathways, all have
experienced noteworthy growth and development in recent years. China adopted a
gradual "firing-from-the-bottom" approach toward reforms that started in the
agricultural sector and later moved to manufacturing and services, spurring
private investments and rural nonfarm growth and employment. With its accession
into the World Trade Organisation, China introduced a more open and
export-oriented trade system that included reduced agricultural protection
policies.
Agricultural productivity in China was below Pakistan's level in late seventies
but now it is many times higher. In industrial production we were not far behind
in the 1960's but now we are no where near.
India employed a top-down reform process that started with macroeconomic
policies and the services sector and then moved to manufacturing. Partial policy
changes related to agriculture focused primarily on agricultural trade
liberalisation, with the sector retaining many distortions. As a result, the
service and manufacturing sectors are performing much better than the
agricultural sector, with poverty reduction driven largely through trickle-down
effects.
We failed both in harnessing our agricultural and industrial potential. In fact
we did not take advantage of our strategic position as being the cheapest
gateway to Afghanistan and Central Asian markets. India is making inroads in
these markets by importing raw material from these regions and exporting
finished products. More than 80 per cent of the coal mines Afghanistan have been
leased to Indians who would dispatch the coal through Wagah border to India,
courtesy latest Pak-Afghan Trade Agreement. Brazil implemented policies
promoting budgetary restraint, market deregulation, and an increasingly
export-oriented economy. These reforms benefited Brazil's large scale commercial
farms, largely leaving small-scale farms behind. Economic liberalisation
policies have thus been accompanied by expanded and better-targeted social
protection programs to tackle food insecurity and extreme poverty.
Strong economic growth in these three countries has translated into more
dominant positions in the world economy. In fact, the three countries have been
among the top 10 largest economies in the world since the 1990s, and their share
of global gross domestic product (GDP) is predicted to increase in the coming
years, with China edging ever closer to the dominant position held by the United
states. The three countries' performance in reducing poverty and hunger has been
mixed, however. China has made remarkable progress in reducing poverty, cutting
the share of people living on less than $1.25 a day from 84 per cent of the
population in 1981 to 16 per cent in 2005 and reducing the number of poor people
from 835 million to 208 million. Yet poverty reduction has been uneven over time
and across China's regions and has been accompanied by a steep rise in
inequality.
The share of undernourished people in China fell from approximately 15 per cent
to 10 per cent of the population between 1990-92 and 2004-06, or from 178
million to 127 million undernourished people. China's reform process highlights
the importance of a sound investment and institutional climate and support for
agricultural and rural development. China's reforms were implemented through a
pragmatic trial-and-error approach that entailed testing pilot programs,
evaluating results, and scaling up successful ideas. In India, despite a
significant reduction in the proportion of people living in poverty (from
approximately 60 per cent to 42 per cent between 1981 and 2005), the number of
people living on less than $1.25 a day increased from 420 million to 456 million
between 1981 and 2005. In India, however, despite a modest drop in the
proportion of undernourished (from 24 to 22 per cent), the number of hungry
increased from 210 million to 252 million during the same time period. Moreover,
India accounts for 42 per cent of the world's undernourished children.
India 's experience with subsidy policies shows that public spending allocation
choices and impacts need to be viewed as dynamic rather than universal and
permanent. Another lesson comes from India's experience with increasing the
targeting and efficiency of rural public works programs through extensive
participation of village councils and civil society. Brazil reduced the number
of poor from 21 to 15 million (from 17 per cent to 7 per cent of the total
population) between 1981 and 2005. Brazil experienced a decline in the rate of
under-nourishment from 10 per cent to 6 per cent (16 million to 6 million
undernourished) during the same period. Developing countries can also learn from
Brazil's social protection policy experience with conditional cash transfer
programs, which achieved more efficient targeting through more reliable systems
of information gathering and more rigorous evaluations. Brazil's experience has
also shown, however, that agricultural growth can bypass smallholders and the
landless, highlighting the need to complement social protection policies with
productivity-enhancing interventions for smallholders.