Boom-Box Mentality

Gone are the days when economists and financial experts used to talk about the emergence of the “new economy” before 9/11.There are still, however, many in Pakistan who think across the same line even after 9/11, the impact of which has thus reached far beyond the World’s security. These so called financial and political experts are not different from their predecessors in giving advice that can help officials build up a strong, genuine and adequate plan to over come the economic and the political adversaries that has engulfed Pakistan through out the course ofits history.

In this rapid changing World, the focal point of their arguments is hardly going to make any drastic impact on the over all direction of the economy. “Anatomy of Remittances” by Shahid Javed Burki is a sublime example of impaired trajectory that will only be categorized as a “boom-box mentality” in the “Military-Bureaucratic Joint Venture”.

What we need, in fact, is some acute measures that will undoubtedly be continuing to be a major factor in the mainspring of the economic growth by using the knowledge-based capital in the Global marketplace.

Foreign Aids and Remittances can play a minute role in the careful management of the economy but can rarely be considered as the definitive factor in pursuing high productivity growth rate and significant increase in the employment.

Instead of relying on the foreign aids and foreign remittances, we need to focus on creating a system that can en-able us to create not only regional wealth, but also can help us compete in the global economy through self-made adaptation to the “Innovative Economy”.

Quite understandably, skeptics of the “Innovative Economy” as a mean of promoting an idea for financial impunity and supporters of the “Musharraf-Shaukat divisor” may come up with an argument that Pakistan’s different stage of development and history will not be able to pug-in.

Really! If that’s going to be the core reason, the answer would be “Adaptation and not “replication”. Forget about China; learn from India, Taiwan, Sweden and Israel.

When we talk about adaptation, we neither need to replicate our regional economy or political institutions to the most successful models of the world, nor we need to follow any particular model, the one like Silicon Valley that became the symbol of the “new economy”.

What we can do is to learn from different successful models of the World and then create our own model based upon our geographical history or different stages of development. The same is true for making Pakistan a democratic society, because with political upheavals, nothing can be anticipated. The rule is “get the politics right, economy will follow”.

Now, “Innovative Economy” is about all of this. We can be a part of that IE if we create our own region by investing in entrepreneurial-innovative technology, linking regions and creating wealth. If we are on the decent track we don’t need to depend on the foreign aids and remittances as a means to balance our books and telling a half truth of achieving an economic growth rate of 7% with the employment rate taking a down-turn. Mr. Sultan Ahmed’s article “Higher growth, less jobs” is worth reading.

We also need to figure out why some regions are attractive to foreign direct investment (FDI). One reason might be making the policies “attractive” rather than “aggressive” and implement the policies feasible not only by accepting different technological and venture capital but also by accepting different “Ideas”.



Just like bashing and demonizing the opponents can scathe the political process, so can pursuing a hidden agenda of the “Military-Bureaucratic Joint Venture” by backing someone from the World Bank impairs the financial and economic growth. The key is to openness to all different kinds of ideas. The only difference is, at the time when the then foreign minister Sartaj Aziz went to address a gathering of Pakistani Physicians in the United States, military was playing the short theatrical episode in the back, and now it’s playing in the front.

Now, let’s take a look at India which started off almost at the same time as did Pakistan.

After its independence in 1947, India started off by making protectionists policies in order to have strict controls over its economics as well as financial institutions. But after an austere 50 years, the World is watching in gape India’s transformation from a closed-protectionist society to an absolute open economy fostering entrepreneurial-aspiring after in the technological sector.

Shifting paradigm in India took place after Rajiv Gandhi’s election in 1984, which helped its economy giving a new direction by opening up its financial/IT sectors to the International Markets.

Even after the crises in the 90s that made the international loans less available for India, unlike Pakistan, the Government in India moved to overhaul the overall system by liberalizing its closed-door economy to open up its markets. The efforts made in that regard resulted in a changed foreign regulation policies, simplification of its old rigid tax-policies and introducing new tax-incentives to sectors that need development such as building infrastructure and development of its IT-Sector.

The role played by Indian Government deserves a fair credit. They wanted to plug-in, and they did it. They’ve developed their own valley, “the Indus Valley”, not by replicating the “Silicon Valley” but by plugging-in to linked-technologies and thus by adapting to the (IE).

Created through wars in the mid-20’s century, both Taiwan and Israel have excelled their efforts in opening up their markets despite their lack in natural resources. What they had, was their Intellectual capital. Israel provides new technological products and ideas in communication services, Taiwan excels in providing semi-conductors and Ire-land excels in attracting FDI to expand its industrial workforce.

Only those regions who’s Governments are willing to plug-in to the (IE) can create regional wealth by allowing not only the entrepreneurial-technological ventures, but also by willing and providing their opponents to participate in the over all development of the country, both politically and economically. Let’s see how far General Pervez Musharraf and his supporters from the World Bank can go, because with political upheavals nothing can be anticipated.