The News on Sunday: How do you assess the state of Pakistan’s economy at the moment?

S Akbar Zaidi: Pakistan’s economy is in a precarious state. There is no direction, thinking or understanding of how to address key economic and political economy issues. While this is a systemic problem across most political parties, every incumbent government in power must answer for the way things exist under its watch. While many issues are structural and have been around for decades not being addressed by most governments, I think this particular government has had little stability in its economic team having four finance ministers in less than three years, which does not augur well for direction, stability or reform process despite good intentions.

The two main areas where the economy is most vulnerable, are the fiscal and the balance of payments crises. Our tax base remains narrow and is dependent on a regressive and inequitable indirect tax system. In the case of our balance of payments, we have almost nothing new to export with exports stuck at around $25 billion for many years. We cannot keep relying on remittances to save our economy. The third major problem is circular debt, and there are countless others. Few governments have the capacity and knowhow to address key structural problems as this government has shown.

Interestingly, however, provinces are performing far better than the federal government. More devolution and autonomy, and less interference by the federal government at the provincial and local level is one way of solving the problems of Pakistan’s economy. A new National Finance Commission Award is a good starting point to further strengthen all four provinces.

TNS: Do you agree that on the one hand there are tens of millions of people in Pakistan who have been condemned to live in abject poverty and on the other hand, there are others who are filthy rich? Don’t those who make up the lower and middle classes seem to have been washed away?

SAZ: Indeed, this is the case. There is extreme and growing inequality in wealth, income and opportunity across Pakistan and within provinces. Much of this is due to Pakistan’s inequitable taxation and resource allocation systems. The rich are getting richer and have access to power and privilege while the poor barely survive. The Panama and the Pandora exposes only confirm such observations.

However, there has also been huge social transformation and structural change and the middle classes have acquired power, representation and upward mobility. Since the middle classes have grown, they have also become more educated and attend colleges and universities, they too compete for jobs and positions, although they are very disadvantaged. There has been a middle-class revolution in Pakistan and many individuals from such backgrounds have made their names in business and in politics. Power has shifted from the few who used to rule Pakistan to the many who now have a voice. You see this especially across urban Pakistan. Pakistan is now dominated, though not as yet ruled, by the middle class.

There is extreme and growing inequality in wealth, income and opportunity across Pakistan and within provinces. Much of this is due to Pakistan’s inequitable taxation and resource allocation systems.

TNS: Do you agree that in Pakistan and in India fascism rules the roost?

SAZ: Fascism is a very loaded term and used very loosely. I prefer ‘authoritarian’ since fascism has a specific structure, nature and history. Authoritarian countries can be dictatorial and also take measures which one would call ‘fascistic’. I think the absence of voices, freedoms and the weakening of democratic trends – in which a free media is paramount – have led many countries across the world to become dictatorial and authoritarian. Pakistan and India are in that group. If we look at political theory academically, the rise of the middle classes was seen as the birth of some secular and liberal order, based on European experience. This theoretical formulation has changed almost completely, with the middle-classes, everywhere, becoming insular, insecure, authoritarian etc giving rise to various shades of populism. Based on the experience of the last few decades, theory needs to be rethought and rewritten.

TNS: Do you agree that instead of looking towards the West for sympathy we should have cordial relations with our neighbouring country, India? That can pave the way for a South Asia Union like the EU. This will boost our economy and help us earn millions of dollars in ecotourism and medical and religious tourism.

SAZ: Absolutely. I completely agree that the future of the people in South Asia lies in solidarity, collaboration and cooperation with one another. Our future is here, together. There is no question about this. However, we need to distinguish between how countries collaborate and how people collaborate and work towards goals which are similar. If we agree that both India and Pakistan are increasingly undemocratic and authoritarian, I am not sure how greater collaboration would benefit the people of either country. It would in some broad sense, but greater collaboration between people – peace activists, intellectuals, scholars, artists, etc – would have a greater impact on how both countries see each other and how people can change their futures. Two authoritarian countries joining hands and collaborating could only mean more despotism for the people. Imagine two military states ‘cooperating’ with each other to supress freedoms and voices. While both India and Pakistan elect their own governments – although the space for free and fair elections and freedoms of speech and action are being suffocated – if those who question the politics of their own countries can find greater solidarity between peoples across the border, that would be far better. What ought to matter is people, not just countries.

TNS: Do you agree that the US is no longer the sole superpower and today we live in a multi-polar world?

SAZ: Global power shifts over time, over centuries. Once imperial Britain ruled the world; followed more recently by the United States; and in some areas by the Soviet Union. Now the rise of China is the single most important global event this century, and this rise of China is only just beginning. We are living the moment when the power and control of the US has waned and is now confronted with the rise of China. Also, regional powers, like India, have emerged, as have others on each continent. This transition will take many decades for power to shift from one region to another. Moreover, the nature of imperialism is also changing, and this will define the future, at least this century. We see and learn that occupation alone is not the way imperialism and colonialism function nowadays and in a globalised world, different forms of control and manipulation exist. The US model of occupying countries through war – Vietnam, Iraq and Afghanistan – has failed miserably and softer forms of power – mainly economic and diplomatic – are making their way round the globe. This is now an interconnected world – the climate change crisis is perhaps the single biggest example of this – and while power shifts from one country and region to another, mutual and shared responsibilities and tasks still exist.

The interviewer is a journalist and peace activist. He writes on health, heritage and environment issues. He can be reached at shahidhusain01@gmail.com