Dr. Shahzad Latif's Recent Writings




Pakistan: In need of Political, Economic & Social Revolution
by Shahzad Latif Ph.D. (Political Economist)


Ever since I have come to maturity I have been hearing that to root out corruption there is a big revolution coming to Pakistan.

Can anybody please tell me when is this revolution coming and who is bringing it?

I believe the time is now and every individual has to part-take in bringing this revolution. This has to be comprehensive. For all the nation’s shortcomings to be properly addressed, attention should be given to aspects of political, economic and social change.

Political Revolution:

One thing is certain -- as long we continue on this path of Parliamentary system of Democracy we will not see the change. Because this suits the corrupt politicians, based on a you scratch my back, and I scratch yours principle. Unfortunately, this particular system has proven to be such in many countries.

A formed government which has the majority of the votes in parliament (whether collusion or one party) tries to continue to remain in power by indulging itself in corrupt practices and ignoring corrupt actions of its supporters. Thus all involved in the government take advantage of the system. Also, under this system, the political parties fight over who supports whom, rather than concentrate on issues of the public.

Pakistan unfortunately is in a parliamentary democracy quagmire. I call this quagmire because unless the elected parliamentarians amend the constitution to change the system, real change will not happen.

However, many politicians will resist such an effort because it is akin to relinquishing their power. The only way to make these elected officials to bring such a change is through a Lawyers' Movement, like the action we experienced a couple of years ago. There is a need to mobilize students and journalists for this purpose as well.

This parliamentary system needs to be replaced by presidential system of democracy if we have to remain as a democratic country. See, in Pakistan let us be straight we can find at least one person who is honest and sincere, and who can lead the country to a better future. Also, that person can bring in people as ministers who have pain for the country and want to do something good for the country.

A presidential system has better check and balance built in. Most of the power rests with the president. This system is also closer to Islamic Caliphate way of government. President gets elected straight by the people. No way a person who puts his or her own personal interest ahead of the nation can attain such position. People can scrutinize the person being elected thoroughly, rather than an individual being “selected” as president by the parliamentarians who suits them.

Additionally, under this system, people also elect parliamentarians (or members of Mujlese Shura) as their representatives, therefore they can elect people who provide an effective check and balance as well as bring their regional issues to the forum.

Under presidential system President appoints ministers as per their expertise rather than against the support to form the government. There is no pressure on president to have unnecessarily huge cabinet, and thus carry superfluous financial burden.

Also, president must be the commander-in-chief of the Armed Forces thus diminishing the chances of perpetual martial law. This will also help control the wasteful defense budget. This system will curtail discretionary powers which tend to be corruptible.

At provincial level we should have structure similar to the federal level i.e; governorship and provincial parliament.

We have experienced the parliamentary system and its consequences over the past 63years. Now it is time to make a change. There is a need to start the movement to change the system.

Journalists, students and lawyers need to take the lead and force the parliamentarians amend the constitution to bring in presidential system of government in Pakistan.

Economical Revolution

We have to revert to quasi-socialist economic system for a short period of time. I see no other way to put a break on this unfortunate hyper inflationary vicious cycle we are experiencing.

As people know economic activity is controlled by monetary and fiscal policies. Fiscal policy is something controlled by the executive branch of government and monetary policy by the State Bank.

Fiscal policy in a nutshell is ideally based on balance of revenue and expenditure. It is OK to carry deficit finance in order to run economic developmental programs, however, in Pakistan the problem is two-edged sword. On the one hand, revenues are way low because of the lax tax laws as well as tax collection issues. On the other, there is corruption in spending. These factors result in a huge deficit and prompts relentless borrowing both domestically and internationally. Thereby we end up in a position where we have to take dictations from outside for our policies.

On the Monetary policy side, State Bank is supposed to control circulation of money by keeping the inflation situation in view. It is commonly understood that inflation is a cause of high demand. However, it is imperative to understand that in Pakistan's case inflation is not predominantly result of too much money circulation or in other words high demand. Our case unfortunately is totally opposite. In our case inflation is due to shortage of supply.

Our poor people cannot afford basic food, gas, electricity, CNG etc. How would they add to inflationary pressure?

State Bank of Pakistan tends to control inflation by increasing interest and other money controlling monetary policy instruments. In case of Pakistan money needs to be made available so that it is invested, basic necessities are made available and jobs are created.

We need to eliminate supply side frictions so that basic necessities of the poor masses are met.

We are an agrarian country. We need to take a hard look at our this sector. First we need to make sure our masses are fed, and then use the rest of the food to create jobs i.e; in food processing industry.

To start with we will need to highly subsidize the production factors involved in this sector i.e; seeds, fertilizer, technology, and extend the availability of water etc. Crops must be better managed, and directions and incentives should be given to farmers what to grow and when.

Think about it. If our masses are not properly fed then how productive can they be?

We need to build cold storages so that we can save food products until the new crop comes in. When the new crop is about to come then allow export of processed food stuff. We simply cannot afford to export foodstuff when we have hyper inflation at home due to low supply of food items. Disallow export of any raw materials. Only value added products i.e; textiles/garments, processed food (beyond domestic needs), leather goods, etc. must be allowed. We need to create jobs at home.

We must subsidize petrol/CNG/electricity/gas no matter how much we annoy i.e; IMF. High prices of these are hurting all of industry. We need to find immediate alternative ways to eliminate shortages of these.

We need to pay serious attention to encouraging research and innovation. Research and innovation are basic elements of economic development. New products must be manufactured and exported. Our exporters for the most part tend to compete amongst themselves so much that they end up working on minute margins. Thus they start exporting low quality goods.

There is a huge need of building infra-structure. This will help reduce inflation as it will help bring consumables to consumers fast. It'll help the redistribution of wealth as under-developed areas will develop. This will also reduce rural-to-urban area migration thus reduce pressure on major cities.

It is imperative to increase education budget to 20%. Improve condition of existing schools. Establish vocational schools where youngsters can learn and earn simultaneously because basic reason for high drop out rate is that poor parents need kids to work in order to supplement family income.

We must divide up lands and give to poor farmers. This will serve two purposes one poor farmers will be on their own and be able to earn decent living for their hard work. And secondly and very importantly, political clout of the landlords will be diminished.

How we are going to pay for all this if you ask. First we need to stop making wasteful projects and channel the money to the right things. Secondly, tax laws need to be revisited and must be enforced without prejudice to enhance tax collection.

Social Revolution:

There is a need to take concrete steps to eradicate current state of mind of the nation which is resulting in corruption at every level, including individual, bureaucratic and governmental.

After all the needs are met it is imperative that individuals focus on something good. And that good isvolunteerism.

Volunteerism teaches how to lead, how to follow, politeness, sense of service, ownership of the society & country and pride of being a citizen. It will help change wrong attitudes towards education, cleanliness, carelessness about others, most of all lack of respect for others' rights. It will help individuals stay busy with good and keep them away from things considered socially evil.

Volunteerism must start at the grass roots level like muhala (street), school and college. They could help keep the street clean, help educate people etc.

There are two ways to eliminate terrorism, corruption and criminal activities. The most importantly being the availability of jobs. People have to fulfill their hunger as it is the very basic need of a human being. Unfortunately, due to lack of income they follow the wrong way. We need to do everything humanly possible to create and provide jobs.

Secondly, we need to make tough laws, establish and enforce harsh punishments against corruption and other criminal activities. Hire and train young police personnel at very high salaries so that they do their job diligently and honestly.

All three aspects of revolution needs to be brought out simultaneously so that we can root out the common thinking where individuals opt out by simply saying “how will my individual change help when others in government and bureaucracy are corrupt”.

This revolution has to be unanimous and in a manner it is taken very seriously.

Keep in mind we have some good friends in the world. Once they see we are embarking on a plan to change ourselves for the better they will come forward and help us get through.

I think we have talked enough. Talk show hosts need to help bring new faces to the horizon. Tell the masses about them and discuss their ideas and show what they could do for their good.

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Does a Government based on Parliamentary system of Democracy has the Will and Power to Eradicate Corruption in Pakistan?

by Shahzad Latif Ph.D. (Political Economist)

When a minister in Pakistan, from an important collusion party is caught allegedly involved in corruption it creates a highly embarrassing situation for the government. He is let go in order to show that the government is doing everything possible to eradicate the nuisance of corruption from the country. This action of the government puts it in a very dire political situation.

However, is this removal because of government's will to eradicate corruption or simply to save itself from a bigger and potentially higher danger i.e; its collapse. When this episode happened the situation in Tunis was very fluid. Everybody was guessing that this sort of a situation could occur in Pakistan as well. In order to avoid this potentially bigger problem the government took this very delicate action.

Also, it was hoping that this action will keep the cover on other many corruption cases taking place behind the curtain.

When a political worker joins a party and works so hard for it, he has some dreams. One is to attain certain position at a level depending on time spent and work done for that party. He ultimately likes to become a minister. In a parliamentary system ministership is a trophy he attains when his party comes in power as a majority party or through a collusion.

When they attain such position(s) they do everything within their capacity and approach to get rewarded for all the work they have done for their party. They embezzle billions of ruppees.

Some borrow money and take it outside the country to invest. This is because they do not have the intention to pay back the money to the banks they borrowed from. Some get licenses for things illegally. Some get lands those are not supposed to be sold.

By many individuals who have been able to steal or borrow, billions have been stashed away in other countries. This parliamentary set up of government cannot take any action to have that money brought back because of two reasons; one being they have support from those individuals which is extremely important to stay in power, and secondly the people who are part of the government themselves are culprits of such actions.

Therefore the government has to look away from the corrupt actions of these individuals.

 

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An Article by Dr. Shahzad Latif reported by Associated Press of Pakistan and published in Business Recorder, Pakistan Observer, Lahore Observer & other newspapers:                                                                               Sep 12th, 2011

WASHINGTON: Ten years after Pakistan joined the fight against terrorism, its economy has been severely hurt by unrest emanating from the Afghan border and the US should now bolster American investment and trade access to help its partner regain growth momentum, a Pakistani economic expert in US, said.

At the same time, Pakistan needs to reform various sectors of the economy boldy to attract greater inflows of international investment, Dr. Shahzad Latif, a Chicago-based economist, said.

"The United States continues to call Pakistan an important ally in the war on terror. For the US to prove that point, it is imperative that it does something concrete (economically) in return (for Pakistan's anti-terror efforts)," added the economist.

Islamabad announced last week that economic losses the country has suffered in the decade - since 9/11 attacks on the US and subsequent American invasion of Afghanistan - have now climbed to $ 68 billion.

Dr Latif particularly wants Washington to open up its markets for Pakistani goods, especially agro-based products such as textiles - the mainstay of Pakistani exports.

The economist says he cannot fathom the lack of progress towards a preferrential trade initiative for Pakistan during the last ten years while some other countries in the region have had generous access to the US market for a long time.

Pakistan has not only served as the key route for Afghanistan-bound NATO and US supplies but also suffered immensely in the face of retaliatory terrorist bombings for its anti-militant campaigns, with 35000 deaths and resultant shrinking investment in several sectors.

Islamabad has captured and eliminated hundreds of al-Qaeda linked militants, who fled into its tribal areas from Afghanistan after the US-led forces toppled the Taliban government in Kabul in late 2001.

A study unveiled last week by Carnegie Endowment Fund for International Peace in Washington made a similar case for easing access for Pakistani textiles, reminding policy makers that employment generation cancels out appeal of violent extremists.

"Pakistani goods suffer from extremely high tariffs that make it difficult for Pakistan to compete with other low-income, textile-producing nations ----- protectionist interests in Congress have kept the United States from reducing tariffs---- lowering tariffs on Pakistani apparel and textiles would not be a panacea but it would help attract investments and spur economic growth in Pakistan," stresses the study entitled Stop Enabling Pakistan's Dangerous Dysfunction.

Dr Latif, for his part, notes that 80% of the political and social problems stem from economic issues.

"The US needs to target these economic problems of Pakistan and invest in industries through private companies such as guaranteed loans by US Import Export bank --- when people have jobs, they do not come under influence of miscreants," he said in reference to Washington's avowed commitment to assist economic uplift of Pakistanis.

On Pakistan putting its economic house in order, Dr. Latif says steps must be taken to curb inflation, develop human resource, encourage value added products, enhance production, and overcome energy crisis.

Copyright APP (Associated Press of Pakistan), 2011

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An Interview of Dr. Shahzad Latif by Associated Press of Pakistan and published in Business Recorder, Pakistan Observer, Sri-Lankan News & other newspapers:                                                                               Nov 21st, 2011

US asked to Assist Pakistan in Development of infrastructure

 

Washington—The United States, whose endeavor to bring peace and security to Afghanistan and larger South Asian region depends critically on Pakistan, should invest in developing infrastructure in the South Asian country, a political economist said.

“If Pakistan is to serve at the center of trade between South Asian countries and the Central Asian region, then the U.S. and its allies must devote resources to helping Islamabad step up the process of building roads, bridges and rail links as well as energy projects,” Dr Shahzad Latif said in an interview.

The Chicago-based economist cited President Dwight Eisenhower’s achievement in this respect, saying in 1930s the American leader envisioned and embarked on a plan to build roads stretching all across America thus connecting all of its cities and towns to each other.” This proved to be a major reason in making the United States an economic might.”

Besides, infrastructure facilities help bridge the divide between the rich and the rural underprivilged communities as the network gives everyone a big chance to transport their goods and intrdocuce them to the main market. Islamabad, he said, should present to its friends in the international community a plan to build road infrastructure that would establish new economic hubs and fuel both agricultural and industrial growth.

Dr Latif noted that a network of infrastructure will give economic opportunity to people and help reduce real estate inflation and also help subside migration pressures on urban areas. Besides, he said, having good and safe roads to tourist destinations boosts tourism economy. he added.

“It is very important to strategically plan the infrastructure keeping in view different factors such as ports, connection with international roads, availability of production input factors like agriculture, minerals, stones, and tourist spots in order to makes the most of resources.” —APP


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