15-05-2025
- Business
- Business Recorder
Mission-oriented economic policy
There seems to be a lot of focus on the working of ministry of finance, which is not to say that its role is in any way less important than other sectors of the economy, yet given a world of polycrisis, including unwarranted belligerence from the country's eastern neighbour – which was met with overpowering but justifiably measured force by Pakistan – the role of economic policy, especially towards improving economic institutional quality – or ministries at the federal, and departments at the provincial level for subjects totally in provincial domain and underlying organizational, and market development, in particular in terms of governance and incentive structures, should serve as a much more strengthened second line of defense.
Hence, economic policy-making on these lines is approached to provide much-needed enhanced support to further augment otherwise sound efforts of armed forces for ensuring national territorial independence. In addition, such economic policy is needed to improve protection against the existential threat of climate change crisis, and the related 'Pandemicene' phenomenon, the attainment of sustainable development goals, sustainably managing the debt distress, building-up ample foreign exchange reserves, managing inflation, reducing poverty and inequality, and strengthening democracy.
Moreover, economic policy needs to be approached in a mission-oriented, purpose-driven way, where the best minds in economics globally, especially those who have a grip on the misgivings of neoliberal economics of the past four decades– for instance, but not limited to names like Mariana Mazzucato, Isabella M. Weber, Joseph E. Stiglitz, Clara Mattei – need to be brought together, and along with local policymakers a certain multi-year economic policy, and supportive budgetary framework needs to be developed. That such plans have required level of inclusivity for greater acumen, indigenous knowledge, international best practices, and ownership, all major political parties, all provinces, and multilateral/bilateral development partners are taken on board in these discussions.
The fast-unfolding nature of climate change crisis, the related presence of high likelihood of the 'Pandemicene' phenomenon, and strengthening economy as a power house in support of national defense – which despite the economic weaknesses is very strong, something that speaks volumes of its excellent potential, and provides great opportunity to develop it further to heights that can propel it as second to none – is important to be done as a second defense to nation's territorial independence, for wellbeing of its citizens, for enhancing the quality of its democracy, and for improving its standing among economies globally.
For one, a project-based approach needs to be nested in an overall programme-based approached with sector-level economic policy is formulated, and budgets – federal, and provincial – are evolved in an aligned way. Second, the civil service is replaced with 'one' public service, which represents all the economic sectors, and where performance-based streams are distinguished along the lines of 'fast-stream' and 'regular streams'. Underlying educational systems improved for better quality of labour-, and entrepreneurial segments, together with merit-, and qualitatively improved screening processes put in place for better graduation of human capital to decision-making hierarchy, and innovation-led economy.
Third, broad economic policy contours thus reached as a consequence of this mission-oriented economic policy should see the interconnectedness of economic policy, with environmental, and epidemiological policy; not to mention a document reached on these lines, with profound consensus behind it will most likely, and at least in terms of its broad framework, have enough strong status as a convention to safeguard against decisions made on whims by changing political regimes over time.
To illustrate some important motivational, and inspirational streaks that perhaps should define the manifestation of the mission-oriented nature of such a policy framework, the purpose-driven, mission-oriented spirit could be understood further from the herculean task of landing man on the moon in just one decade taken upon by former US President John F. Kennedy. Speaking at the Rice University on September 12, 1962, he said in this regard 'We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.'
We saw the success of the 'all of state' approach while fighting against India recently, and it is this approach that should be taken in economic policymaking with high ambitions, and strict timelines – small dents will not make needed headway, when what is needed is a one big push, and within-it number of small pushes from all sides are made, and all that is done in a challenging timeframe. The burden of past sub-optimal decisions with regard to economy, for instance, requires this. We need to challenge ourselves, because the economic problem at hand is a really challenging, made all the worse by lack of course correction – for instance, and very importantly not moving away enough from neoliberal policy mindset, and in many ways sadly, such policy framework continues to get perpetuated because it serves the extractive politico-economic institutional designs of the elites.
That economic policy will need to imbibe the spirit of Franklin Delano Roosevelt's 'New Deal Policies' of a more responsible financial system, and a meaningfully caring, welfare-natured government, which will also have a strong grip in terms of its own capacity – and not majorly reliant on 'outsourcing', neither just there to fix market failures, or only exist as only a facilitator of private sector – to deliver safeguard the interests of its demos, through playing a significant role in regulation, and market creation as an equal partner to private sector. After more than four decades of rein of Neoliberalism, there is some shift away from it, and which includes pushing towards bringing protectionism in the US – with consensus on this policy on both sides of the political spectrum, and the only difference is the degree of intensity – for enhancing productivity of the agricultural and industrial sector. Pakistan should learn from this approach, and move away from Neoliberalism.
That mission-oriented economic policy needs to be established as 'Green New Deal Policies' in view of the fast-unfolding of climate change crisis. In this, it has a lot to learn from China as a leader in renewable energy. Like Nordic countries, it has a meaningfully strong government sector on the lines indicated above.
Among other important things to learn from China in the field of mission-oriented economic policy – given its exceptional path to success in reducing poverty in just a few decades – is its strong emphasis on escaping the price shock therapy, and instead adopting the 'dual-track' pricing framework for achieving sustainable macroeconomic stability, including efficiently-managing inflation, and laying an important basis for bringing fast-paced development of especially heavy industry, and enhancing the productivity of the agricultural sector in overall improving domestic production, and export competitiveness. So, while it is important to carry forward the projects under the China-Pakistan Economic Corridor (CPEC), it is also important to learn from the economic policy approach of China.
Moreover, it needs to be pointed out that while India has excelled in terms of economic growth for a number of years now overall, that growth nonetheless has strong elements of neoliberal policy, which means that it has enhanced the gap between rich and poor, and has also weakened democracy in the process. On the contrary, China has adopted non-neoliberal policies – for instance, not going for outright privatization, and instead in most cases adopted innovative ways to keep government's check through coming up with mixed-ownership model for running state-owned enterprises, and also did not follow price 'shock therapy' policies, and also has meaningful capital controls, and reasonable level of significant protectionist policy – to make unprecedented dent to poverty as not seen before at least in recent human history, which should serve as important learning for Pakistan economic policy framework.
Copyright Business Recorder, 2025
