Evaporation Drops the Temperature

saaf-go,

wait on, I was not talking about that type of corruption. I was talking about a situation where there are two `competing` investments, the one who pays bribe to th bank manager gets the loan. In such a situation, corruption is only a transaction cost, abank charge, collected by the manager, which effectively increases his pay, and has no adverse economic effect.

Now coming to your point, the type of system you are taliking about, can only exist at a relatively small level. For example, if the loans are not `invested` in an economically sound manner, it will be impossible to repay the loans, the non performing looans of the banks will increase and usually when it reaches around 40% of the loan portfolio, the bank will collapse.

The fact that there are still private and public sector banks still op[erating in pakistan is the proof that you are exagerating the level of corruption. Have you heard of `grmeen bank` in bangladesh, it is not a small time operation, more than US$ one billion has been lent with non performing loans at less than 5%.

:Who are the people at the two ends of the :bell-shaped empowerment curve for

:Pakistan? At one end is a minority of individuals :who possess the political/professional/financial :clout to influence progressive change, and at the :other is a self-centered wealthy ruling elite, :that resists change and thrives on status quo.

A wise man said that two fundamental mistakes are that people who lack external decorations -- wealth, power, education, connections -- consider themselves to be powerless or even worthless, and that society considers such people powerless or worthless.

The same mistake is being perpetuated in this article. It is a difficult mistake to avoid.

-arun gupta

Re: Jay

I think corruption has an effect of undermining the economic system itself. When loans are approved without merit and the borrowers do not use it for the purposes it was meant for and the industries fail, losses mount, it does have negative effect. When corruption is as institutionalized as it is in Pakistan it effects the legal and justice system. Public loses confidence in the system and govt. Long term investment dwindles. Strategic investment initiatives are passed over for ones that are more profitable for the corrupt decision-makers. That is the cost of corruption in Pakistan and other third world countries.

Faraz,

While seeing corruption every where and using it as a justification for not doing anything and demoralising the people at home, it is useful to look at Japan where not many want to talk of corruption as an inhibiting facotr in economic progress. Insider trading, hiring of Yakuza to manipulate share holder meetings, colution of govt and private sector and out right bribary are rampant and only the west is talking about corruption, not the Japanese.

As long as the bribe money is spent within the country and there is a consumtion/sales tax regime the effect of bribe is negligible. What the govt loses is only the income tax stream.

If the bribe is taken out of the country, then it is a capital drain there are more significant loses.

One also has to realise that because of the extended family situation, the notion of corruption is more widely cast in the subcon. It is common to see in the west where the children run consultancey companies and deal with the parents companies with out much hue about corruption. The lobyists and facilitators, easily accepted as part of the bussiness edealings in the west are termed corrupt in the east.

All that I was trying to focus on was that corrution is cast as the willian by every one for inaction while it need not be so. One also should not forget that vevery who managed work abroad, even while engaged in jobs at the bottom of the pile think that they infact deserved much better deal in their own country and it is corruption that prevented them from achieving it.

Re: Jay

Corruption a myth? What next, poverty a myth as well? Making a couple of calls to help a relative is one thing. However, when the system becomes so accustomed to sifarish that it becomes a prerequisite to any job then there is a problem. And what about people who do not have connections and are passed over for a position in favor of a less-qualified but better-connected person. That is wrong. The subcontinent has very strong families, and that is a great thing...but nepotism is one of our weaknesses.

Incidentally, I have read a little bit about the efficiency increasing aspects of bribes, but would like to hear your take on it. Thanks

Faraz

To Faraz and other believers of the Myth of Corruption

It is depressing to see anything in India or pakistan reduced to the consequences of corruption. What is corruption, no body apparently has tried to understand it from a sociological point of view.

Corruption, the way it is presented in the subcon is as a consequence of the clash of two cultures, the western and the eastern.

For example, let us looka t nepotism. In the east it is an accepted norm that theat the young look after their parents in their old age, there are not many old peoples home. The parental obligation is unending, all through the scool days, teaching the children, after education see that the get a job, and after that to see that they are married into good families and there after take care of the grand children.

This has to be contrasted with the western norm where in the children chose their careers and are `of the parebts hair` at the age of 16.

In the social context of the east refered earlier, it is understandable that the parents `pull` a few strings to get their children a job. Is this corruption called NEPOTISM. Is it not an action consisitent with the social values.

Having been on the otherside in the West, I prsonally know of several instances where the influence was used, it is called `putting in a word`, there is no talk of corruption, the idea is that `nominall` the selectors are neutrl and has no affect. I can promise you this is not true. In some of the prestigeous companies they prefer to give the jobs to relatives, Nepotism, the word is never uttered.

This is just an opening remark, may be at another stage, bribary can be explained as a transaction cost that has no effect on efficiencey.

It is refreshing to see articles like this one
on CHOWK. Idealism is not dead yet for Pakistanis
but its demise is being announced daily.

Ras

Wrong!!

The ``brain drain`` is not what`s killing the country. Its the factors that cause the brain drain; corrruption, economic mismanagement, law & order etc. I honestly believe it is better for me AND my country if educated Pakistanis make their fortune wherever they can, provided they keep their country in mind when they have made it. It would take one patriotic desi Bill Gates to wipe out Pakistan`s ENTIRE foreign debt (...and still remain a billionaire).

Faraz

okay, so what is your point? This article`s elitism reeks through despite all the working class bull that it attempts to cover it up with. This article attempts to cover up what it lacks in substance and ideas with names of books and their author`s bio data. This article is neither inspiring nor interesting. This article misplaces science analogies and inserts from Dawn to assert a manly factly way of making a point - but really this is fluff..and really there is no analysis.

I agree with Jay and Statesman in a lot of ways. NRIs can bring a lot to the table. They are fiercly nostalgic, romanticizing their experiences in their country. They`d be cursing the place all the time if they were living in it, but from outside, they generally do something for the country. In my place of work, I`ve seen a lot of Indians working for ASHA and other social organizations, the recent NRI participation in the Kargil events is another indicator of the way NRIs can be used.

Think about it..would you like another unemployed engineer in your country when you can have a guy who:

1) Will generally contribute something (even a small amount) to some causes in the country.

2) If influential, will try to influence policy makers in the U.S with regard to their country.

3) If an industrialist, open a factory or business in the country. The sikhs have really done a lot in this aspect. Punjab has really grown thanks in part to the efforts of NRI punjabis (Hindus and Sikhs) in investing back home.

Personally speaking, if I were to remain abroad, I would do 1) and 2) with a substantial amount of my monthly salary and feel pretty good about it. Everybody wins in this setup. Of course, the challenge lies in getting more people involved in these events instead of worrying only about their next car.

Brain Drain is not that big an issue in India any more since there are enough people remaining to replace those who leave. There are more than 100,000 engineers coming out of Indian schools every year, most of them in software. If all them remained here, there wouldn`t be enough jobs to go around. Those that can leave, leave and I haven`t heard any local software company complaining that it didn`t have enough people yet, despite the current boom. The major area where the drain hurts is in heavy industrial sectors, and that cannot be fixed until the salaries go up substantially.

On a side note- isn`t the author the Pakistani COAS`s son?

Dear Bilal,

I think you`re asking the wrong question, so obviously your answer has nothing to do with a real solution to the problem of the brain drain.

Let me attempt to restate a simple problem. Pakistan is a country where corruption rules supreme, not merit. Honesty is business does not exist, nor can it, in competition with dishonest business people who do not pay their fair share of taxes, but are more willing to resort to hartals to avoid the documention of their actual revenue.

Jobs are not being created, at least not the kind of jobs which the educated professional class of people are given to expect. Simply put, lets take a simple representative case. Go abroad for a good undergrad education. Cost $85,000 minimum excluding room and board for 4 years. Add to that trips back home almost every summer. Cost additional Rs.1 lakh per year. Then add the costs of a good 2 or 3 yr graduate program, tuition alone would be about between $42,000-63,000 USD. Now, you tell me if after spending US$150,000 on getting a world class education someone is acually crazy enough to go back to Pakistan and work for a starting salary of between Rs.20,000 and Rs.30,000 at best. People are just not that crazy! Anyone who is, needs to have his head examined and his patriotism literally beaten out of him by his best childhood friends at the behest of his parents.

I`m sorry but after that kind of investment in both time and money as well as effort, most people cannot afford to take a job that pays less than an absolute minimum of US$50,000 pretax per year.

Patriotism is one thing, slogging away for peanuts is quite another. The country cannot afford to pay the market value of people who have invested that much into their education. That simple. The only reason for those people to come back is to set up their own businesses in Pakistan. And not all of them have the capital to do that, nor is anyone quite crazy enough to invest in business in Pakistan today. The honest few pay all the taxes, the successful by definition, don`t pay a nickle, having sold their Zamirs long ago. Thanks, but i think it is not possible to be an honest business person in Pakistan today. You have to cut corners to survive. Ironically, honesty is the norm, not the exception in the West in daily business practices and filing tax returns, which is why only 0.5% of tax returns filed get audited by the IRS, and the system still works efficiently. Everyone who is smart in Pakistan today has a way out, given the daily deteriorating situation in the country. People in Pakistan have 9-5 jobs, 5 days a week. Most of them have never worked a 70-80 hour work week in their lives, and are quite happy where they are. The most industrious, rather than waste their energy fighting a system, a way of life really, have chosen to simply leave and work hard elsewhere where they can obtain the full measure of the fruits of their hard work. Its a sad reality, and i`m not happy about it, but reality is reality. That is not possible today in Pakistan.

So the question which you should have asked is in fact ... Why r they leaving? And then how to change it?

Ans: Simple, they have the skills/talent/motivation to make something better of their lives, and secondly the enviornment in Pakistan is such that it stifles initiative. So they leave in droves. Change? hahaha. Dream on. Fighting the system is a waste, i applaud those who do it, but its a tragic and useless waste of their lives. Who in their right minds would opt differently? (I do know there is at least one writer on Chowk). But her reason was simple ... she missed her family, didn`t fall in love, and therefore being alone, found her life wanting, without meaning. (Trans: didn`t get enough love, hugs and Sex to make it worthwhile to stay) Well, women are more sensitive. Guys just have to deal and turn it around. One doesn`t give up the War after losing a single battle! But one also doesn`t want life to deteriorate into a series of meaningless daily battles either, as is the case in Pakistan when you try to do something productive. Every step of the way someone wants their palms greased. Its the bloody system. Who needs the aggravation of the telephone, the electrics, corruption, nepotism prevelant at every level if they have a sane alternative? The only reason people go back is family, aged parents. Thats it. And that is a sacrifice, not a free choice as i see it. Unless of course you have an Urdu speaking mentality that just can`t adjust to the West as being home and wants ... apni roti, apna makan, ghar ka khana and docile desi biwi who`ll bend over at your whim in both kitchen and bedroom, produce 6 kids, and you visualize life being spent as an extended family under your parents roof.

If you earn 20,000-30,000 rupees a month you are stuck living in your parents house even after marriage for the forseeable future. That is at least for me both depressing and unacceptable in life. I need my freedom, can`t have the things i want in life in Pakistan. But I can have them all abroad, and so can most intelligent Paki expats.

I know someone, from an Urdu Speaking lower middle class background, a guy in his mid 30s who spends 6-8 months a year in N.Y working several jobs ... upto 70 hours a week, alone, and 4-6 months a year in Pakistan with his wife and kids. Why? Because there are no jobs in Pakistan and that is the only way he can survive and pay his bills in Pakistan. He/his family can`t live there on Rs.5,000 a month. Its not possible with a family and kids in school. So this is the life he is stuck living. And he`s not at all happy about it. He also can`t afford to move his family abroad, and i`m not even sure he would, even if he could. And there are lots of Pakis who are just like him here. This is reality.

Reality bites. Your expectations are unreal. Build the country you say! I say dream on! The world is only about getting your share of the pie, and most people are not idealistic enough to believe they can get it in the heat and mitti (with their honest sweat) of Pakistan any longer.

Headline News: Nawaz Promises attract more foreign investment. Sub heading. More KFCs For

Pakistan.



regards,

comments welcome.

The notion of brain drain was fashionable in the eighties, when the third world countries complained about it. Now they have realised that the number of brains is not fixed, the population growth provides an unending supply of brains, and there in lies the fallacy of the psuedo thoretical arguemnt. If entropy can be broadly defined as a measure of randomness in the system, then the birth and growth of human beings lead to reduction in entropy, because out of the random material in the system, an organised being, human, is created.

Emmigration has several positive aspects to it, it reduces un employment, increases the world awareness at `home` apart from the obvious economic and intellectual benefits from the returning emigres.

If the emigres coordinate and do something, as the NRIs have done in the recent kargill event it is a bonus. Even with out it emigration is good for the country.

I do agree that in the case of pakistan, there is a problem and to that extend the main focus of the article as emigration as something negative is understandable. Following the nuclear testing, pakistan siezed the deposits of NRPs, the new word `dedollarisation` is a an original contribution by the paks. India took an alternate path and the resurgent india bonds were oversubscribed by more than a billion dollars. No doubt, the financial wizardy of the offer has more to do than patriotism. But still an approach at variance with the pak where the negative sentiments of the article apparently dominates.

Of course i have come back to my religious theme, muslims living in the west immersed in immoral ways cannot be the friends of islamic pakistan, at least that can explain the dedollarisation.

A very good article. Your analogy serves its purpose (even if it wouldn`t hold in a scientific paper). The educated overseas Pakistanis do have responsibility to the people back home. Some may shirk off such responsibility, fine, its your choice. A lot of us complain about how things are, I believe if a very small percentage of us started actually doing something, things would start to change. Contrary to what ``firaq`` mentioned, I don`t think this article is asking most Pakistanis to wait for some heroes from the west. It is encouraging the resourceful to assert their power.

Keeping with the scientific theme, I believe we first need to pinpoint the problems. Is our problem corruption, lack of resources,over population, too much government intervention, too little accountability? Will mass education fix these problems? Will more money from expats., resolution of the Kashmir issue, more technology, peace in Afghanistan, etc. solve these problems? Do people agree on what the problems are, or is one person`s problem another person`s ideal?

These questions and issues need to be discussed--not just in academic journals but among a wider segment of the population.

I am not quite sure I understand the rhetoric about the working class. The loss of entropy that you talk about largely occurs in the middle and upper middle classes. I agree there are a number of working class south asians in the US but that is probably not what you meant as causing a ``loss in entropy`` of Pakistan (which, as Wasiq points out, is a problematic expression anyway). So let me get this straight...the working class of Pakistan should wait for foreign educated upper class Pakistani to come back and show them the way...What I dont understand is if you want to be so elitist, why talk this working class mumbo jumbo!

I dont know Bilal bhai you had to bring in the complicated anology with physics,bell curve,& perhaps your own field of acturial analysis to make a state ment wich we all (Indian & Pakistanis)know.We(NRI&NRP) has been battling our guilt in to our graves.You very elaborately underline the problem which 3rd world countries like India & pakistan have been raising hell about ``BRAIN DRAIN``Polticians point out that for meagre aids to pakistan & India,west get millions of dollars worth of educated intelligent man power!

What i have found,atleast in India,since major reverse migration has been given up,govt. are incouraging to strenghten,reinforce,solidify the NRIs ties with india,if nothing else declare them as unpaid Ambassodors of India laying ground for better understanding between West & India.It is not coincidence that India has been diplomatically turned the table on Pakistan.BJP govt recognizes its free asset in NRI granted them spl. dual citizenship in the form of P.O.I.(Green Card For India)The active compaigners for both local presidential election are increasingly professional Indian,who benefitting from the economic prosperity are able to apply there technical education in ways they never had imagined.In short there is not going to be any reversal in Migration of immigrants &ist. generation India Pak abcd.Instead of lamenting about what could have been if these brain trust had remained to develop there own govt.What do we do,where do we go from here which is a real fact!